Acquisition International - Issue 1 2018 53 Deal of the Year: WeShareBonds Minority Stake Acquisition La Banque Postale La Banque Postale (LBP) is one of the leading retail banking players in France thanks to a combination of organic growth, successful long- term partnerships and external developments and benefits from a sound capital position (CET1 ratio of 13.6% as of June 30th, 2017) enabling it to pursue its ambitious development strategy. In 2016, the Group net banking income and net income (group share) amounted to € 5.6bn and €694m respectively. With c.11 million active customers, La Banque Postale’s business is focused on the retail banking business in France, and specifically on retail customers. It is organized around three business segments, with Retail banking being its core business, which is mainly focused on individual customers, and has progressively extended to corporate customers since 2011 and to local authorities (“collectivités locales”) since 2012; corporate customers represent c. 10% of the activity. Additionally, the company’s other segments include insurance, dealing in life, contingency, property, general and health sectors, as well as asset management, working in portfolio management and discretionary management. With reference to the acquisition which features as Deal of the Year, La Banque Postale purchased a minority stake in WeShareBonds. The parties involved included the buying side La Banque Postale and its advisors, UGGC Partners Law firm and Bryan Garnier, financial advisor. On the selling side were founders of WeShareBonds; (Guillaume Hannezo, Chairman of the board and Cyril Tramon, CEO) and its advisor (François Bourrier Soifer, lawyer). LBP has taken a stake of 10% in the capital of WeShareBonds, a French Digital P2P lending platform, which offers opportunities to lend to French profitable SMEs, through the issue of bonds. WeShareBonds has also set up two credit funds, which invests alongside platform investors. Since its creation in 2016, WeShareBonds has raised circa € 20m (25% in equity and 75% to seed the credit funds). Interestingly, there were many aspects which were key to the successful conclusion of the transaction, including the quick nature of the deal, negotiation techniques and a strong project which outlined the clear nature of the deal. Regarding the rapid conclusion of the deal, there was a deadline to close the credit fund, and the willingness of the team to strongly develop WeShareBonds, as it had less than four months to study, set up, negotiate, sign and close the La Banque Postale Group is a wholly- owned subsidiary of La Poste, itself owned by the Republic of France (74%) and Caisse des Dépôts et Consignations (26%). We profile the Group as we look to find out about the success of the company. FN170011 operation. This was an impressive factor in the success of the deal. Both sides also had to oversee a negotiation of the governance without breaking the balance of the General Assembly composed of 50 individuals who personally invested in the project at the beginning. Furthermore, another key aspect included the elaboration of a relevant and convincing strategic project to create synergies and support the development of WeShareBonds. Lastly, there was also lobbying within La Banque Postale to promote the first equity investment into a Fintech, which is specialized in an innovative product, converting bonds to finance SMEs. Analysing the success of the deal, there were three techniques employed in the success of the deal but the most important of the play was been to create enough confidence between the two teams, in order to demonstrate that La Banque Postale would not “crush” WeShareBonds, which is a small and agile structure. Common works on the development plan and on the fundraising of the credit fund also enabled La Banque Postale to create trust and to show that the combination of two entities would be very fruitful. Currently, the French retail banking industry is currently very mature and is facing an assortment of challenges which companies will have to adapt to in order to get the best out of their businesses. Throughout France, there are historically low interest rates and a glut of liquidity, which harms the margins for companies. Technology is also becoming a bigger part of the industry, with digital technologies raising the issues of new banking patterns, with potential dramatic effects on the costs, and a necessity to adapt quickly. There are also increasing regulatory constraints, which increase the need of capital, and competition with burgeoning Fintechs, which are less regulated and are increasing part of the industry. Leading on the wider M&A market, there are many trends which are also developing, with this market also seeing a rising increase in Fintechs and new technology, combined with the abundance of liquidity pushing prices upwards and yields downwards. To adapt to these trends, La Banque Postale sticks to its selective criteria of targets, placing a strong emphasis on the industrial aspects such as synergies, development potential, with a long-term view. Lastly, a recent acquisition of 100% of KissKissBankBank, one of the pioneer crowdfunding platforms in France, looks to have set the platform for a promising future for La Banque Postale. Company: La Banque Postale Contact Email: communication-
[email protected] Address: 115 rue de Sèvres, 75275 Paris cedex06 Website: www.labanquepostale.com Deal of the Year