Ifis Bids for illimity Amid Intensifying Italian Banking Consolidation
Deal News | Jan 08, 2025 | EIN
Banca Ifis has announced its intention to acquire Illimity for €298 million, a move that underscores the accelerating pace of consolidation within Italy's banking sector. This trend is mirrored in other transactions, such as UniCredit's bid for Banco BPM and BPM’s effort to acquire Anima Holding. Both Ifis and Illimity specialize in financing small and medium enterprises, though Illimity has been reducing its focus on impaired loans. The proposed purchase will see Ifis offer €14.14 in cash and new shares for every 10 Illimity shares, valuing Illimity shares at a 5.8% premium over their closing price. This bid is part of Ifis's strategy to remain competitive within the Italian banking landscape. Ifis expects the merger to deliver approximately €75 million in pre-tax benefits annually, primarily through cost reductions. Despite Illimity’s stock price drop from a high in November 2021, its shares rose following the bid announcement. Ifis, holding a significant presence in Italy's largest bad loan market, expects to incur integration costs of €110 million, with the merged entity maintaining a robust capital ratio.
Sectors
- Banking
- Financial Services
- Private Equity
Geography
- Italy – The entire transaction is centered around Italian companies—Banca Ifis and Illimity—highlighting the geographic focus on Italy’s banking industry.
Industry
- Banking – Industry involves the acquisition of Illimity by Banca Ifis, underscoring a trend of consolidation particularly among financial institutions in Italy.
- Financial Services – Both Ifis and Illimity operate in the financial services sector, specializing in lending to small and medium-sized enterprises and managing distressed loans.
- Private Equity – The transaction involves a private equity firm, as Illimity had sold a controlling interest in its technology assets to Apax, reflecting activity within the private equity space.
Financials
- 298 million – Total value of the acquisition deal in cash and shares by Banca Ifis for Illimity.
- 75 million – Estimated annual pre-tax benefits from the merger, primarily from cost reductions.
- 110 million – Projected integration costs for the merger, expected to be booked in 2025.
- 3.55 – Bid value per Illimity share, set at a 5.8% premium.
- 3.61 – Illimity's shares trading above the bid price following the announcement.
- 14.14 – Cash and newly issued shares offered for every 10 Illimity shares.
- 52 million – Capital gain from Illimity's sale of its technology assets to Apax.
- 14% – Expected pro forma best-quality capital ratio for the merged entity.
- 5.8% – Premium offered by Banca Ifis for Illimity shares.
- 0.5% – Premium offered by UniCredit for BPM.
- 8.5% – Premium offered by BPM for Anima Holding.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Banca Ifis | Bidding Company | Companies | An Italian bank specializing in financing for small and medium enterprises and loan recovery. |
| Illimity | Target Company | Companies | A digital and cloud-based bank founded in Italy, focusing on financing SMEs and phasing out impaired loan services. |
| UniCredit | Other Company | Companies | Italy's No. 2 bank involved in a separate consolidation effort with Banco BPM. |
| Banco BPM | Other Company | Companies | Target of UniCredit's bid and a bidder for Anima Holding, involved in parallel consolidation activities. |
| Anima Holding | Other Company | Companies | A fund manager pursued by Banco BPM in ongoing consolidation efforts. |
| Apax | Other Company | Companies | A private equity firm involved in purchasing Illimity’s technology assets. |
| La Scogliera | Shareholder | Companies | Controlling shareholder of Banca Ifis, owned by Italy's Furstenberg family. |
| Ernesto Furstenberg Fassio | CEO | People | CEO of La Scogliera and President of Banca Ifis. |