On Friday January 7, XP Inc. a Brazilian investment management company, announced an agreement reached that would make it acquire Banco Modal, a Brazilian investment banking firm. XP stated that it is purchasing a stake of up to 100% of Modal in a deal that will see Modal’s shareholders receive up to 19.5 million in XP shares. The transaction is set to make Modal’s valuation stand at $528.5 million.
XP expects that the deal would enable it to improve its banking credential through Modal, which operates as an investment banking firm, including its investment platform combined with banking and digital services. Modal also has more than 500,000 brokerage clients.
Together, XP and Modal have more 3.8 million clients and a 12-month net revenue of more than $2.08 billion as of September 2021, XP mentioned in a statement.
As part of the deal, Modal will remain independent and keep its branding and will be able to access XP’s technology and infrastructure services.
However, the deal is still awaiting regulatory approval. The firms hope to complete the
merger
Merger
A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers differ from acquisitions, where the buy absorbed all the assets and liabilities of another. A purchase does not necessarily have to be friendly. One business or venture could simply buy up enough shares of a corporation to control it without the consent of its previous controllers, whereas a merger is usually by understanding. A merger is usually a decision by two companies to combine all operations, officers, structure, and other functions of the business. Who Benefits from Mergers?Mergers are meant to be mutually beneficial for the parties involved. In the case of two publicly-traded companies, a merger usually involves one company giving shareholders in the other its stock in exchange for surrendering the stock of the first company. The acquiring company continues to function, and the acquired company ceases to exist. This does not mean that the brand disappears. An example is when Kmart Holdings and Sears merged in 2004. The two corporations announced the combining Sears and Kmart into a significant new retail company named Sears Holdings Corporation. Sears Holdings is the nation’s third-largest retailer, with approximately $55 billion in annual revenues and a national footprint of nearly 3,500 retail stores in the United States. Both Kmart and Sears stores continued to operate under their brand names and identities. Kmart and Sears shareholders each approved the combination.
A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers differ from acquisitions, where the buy absorbed all the assets and liabilities of another. A purchase does not necessarily have to be friendly. One business or venture could simply buy up enough shares of a corporation to control it without the consent of its previous controllers, whereas a merger is usually by understanding. A merger is usually a decision by two companies to combine all operations, officers, structure, and other functions of the business. Who Benefits from Mergers?Mergers are meant to be mutually beneficial for the parties involved. In the case of two publicly-traded companies, a merger usually involves one company giving shareholders in the other its stock in exchange for surrendering the stock of the first company. The acquiring company continues to function, and the acquired company ceases to exist. This does not mean that the brand disappears. An example is when Kmart Holdings and Sears merged in 2004. The two corporations announced the combining Sears and Kmart into a significant new retail company named Sears Holdings Corporation. Sears Holdings is the nation’s third-largest retailer, with approximately $55 billion in annual revenues and a national footprint of nearly 3,500 retail stores in the United States. Both Kmart and Sears stores continued to operate under their brand names and identities. Kmart and Sears shareholders each approved the combination.
Read this Term, which also needs to go through regulators within the next 15 months.
XP Chief Financial Officer Bruno Constantino, talked about the development and said: “Given the immaterial overlap between XP and Modal’s clients, we expect that interesting revenue synergies and client experience enhancements will be captured.”
Meanwhile, XP CEO Thiago Maffra, also commented about development and stated: “Brazil has one of the most concentrated financial sectors globally and together we’ll be able to be even more competitive against the traditional banks. Our priority is to constantly improve the value proposition for Brazilian consumers.”
How Firms Are Adapting during Difficult Economic Conditions
The development by XP to buy Modal comes at a time when competition for strategic market advantage continues influencing merger and
acquisition
Acquisition
Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant’s service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There are many ways to acquire or to take the acquisition of property and services. How Companies Utilize AcquisitionsIn finance, the term acquisition is most often used when referring to taking control of a company. An acquisition can be either an agreed deal or a hostile takeover. Companies also may acquire units of a company, property, or other assets. An acquisition is when one business, person, or company purchases most if not of another company’s shares to gain control of that company. Buying more than 50% of a target firm’s stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company’s shareholders. In finance, there are several types of acquisitions that one speaks of when referring to Acquisitions and Mergers. A horizontal acquisition is when two companies come together with similar products/services. Conversely, a vertical acquisition means two companies join forces in the same industry, but they are at different points on the supply chain.Moreover, a conglomerate represents two companies in different industries join forces, or one takes over the other to broaden their range of services and products. Finally, a concentric acquisition occurs when companies will share customers but provide different services.
Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant’s service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There are many ways to acquire or to take the acquisition of property and services. How Companies Utilize AcquisitionsIn finance, the term acquisition is most often used when referring to taking control of a company. An acquisition can be either an agreed deal or a hostile takeover. Companies also may acquire units of a company, property, or other assets. An acquisition is when one business, person, or company purchases most if not of another company’s shares to gain control of that company. Buying more than 50% of a target firm’s stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company’s shareholders. In finance, there are several types of acquisitions that one speaks of when referring to Acquisitions and Mergers. A horizontal acquisition is when two companies come together with similar products/services. Conversely, a vertical acquisition means two companies join forces in the same industry, but they are at different points on the supply chain.Moreover, a conglomerate represents two companies in different industries join forces, or one takes over the other to broaden their range of services and products. Finally, a concentric acquisition occurs when companies will share customers but provide different services.
Read this Term activities across the financial services industry. In the first half of 2021, deals for technology and innovation continued to trigger such activities. Acquisition and divestitures are expected to continue in the upcoming months, as asset managers, insurance companies, banks, and brokerage firms seek to increase margins and efficiency, optimize cost structures, and grow top-line growth. As such, transformation is in the mind of dealmakers’ overall strategic goals. Troubled by pressure from regulators and persistent low interest rates on one hand, and by disruption from fintechs, platforms, and continued digitalization on the other hand, financial companies need to evolve to meet such challenges. A key aspect of M&A activity is likely to be the continued formation of strategic partnerships and ongoing consolidations.
On Friday January 7, XP Inc. a Brazilian investment management company, announced an agreement reached that would make it acquire Banco Modal, a Brazilian investment banking firm. XP stated that it is purchasing a stake of up to 100% of Modal in a deal that will see Modal’s shareholders receive up to 19.5 million in XP shares. The transaction is set to make Modal’s valuation stand at $528.5 million.
XP expects that the deal would enable it to improve its banking credential through Modal, which operates as an investment banking firm, including its investment platform combined with banking and digital services. Modal also has more than 500,000 brokerage clients.
Together, XP and Modal have more 3.8 million clients and a 12-month net revenue of more than $2.08 billion as of September 2021, XP mentioned in a statement.
As part of the deal, Modal will remain independent and keep its branding and will be able to access XP’s technology and infrastructure services.
However, the deal is still awaiting regulatory approval. The firms hope to complete the
merger
Merger
A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers differ from acquisitions, where the buy absorbed all the assets and liabilities of another. A purchase does not necessarily have to be friendly. One business or venture could simply buy up enough shares of a corporation to control it without the consent of its previous controllers, whereas a merger is usually by understanding. A merger is usually a decision by two companies to combine all operations, officers, structure, and other functions of the business. Who Benefits from Mergers?Mergers are meant to be mutually beneficial for the parties involved. In the case of two publicly-traded companies, a merger usually involves one company giving shareholders in the other its stock in exchange for surrendering the stock of the first company. The acquiring company continues to function, and the acquired company ceases to exist. This does not mean that the brand disappears. An example is when Kmart Holdings and Sears merged in 2004. The two corporations announced the combining Sears and Kmart into a significant new retail company named Sears Holdings Corporation. Sears Holdings is the nation’s third-largest retailer, with approximately $55 billion in annual revenues and a national footprint of nearly 3,500 retail stores in the United States. Both Kmart and Sears stores continued to operate under their brand names and identities. Kmart and Sears shareholders each approved the combination.
A merger is defined as the absorption of the interest of another. It can include an estate, or contract. There are no specific rules or formats for a union in general. It is a method of combining two or more organizations, business concerns, or other related interests. The terms of a merger are usually by agreement of the parties involved. In the financial sphere, merger refers to an agreement between two or more companies or corporations, public and private, to merge into one entity. Mergers differ from acquisitions, where the buy absorbed all the assets and liabilities of another. A purchase does not necessarily have to be friendly. One business or venture could simply buy up enough shares of a corporation to control it without the consent of its previous controllers, whereas a merger is usually by understanding. A merger is usually a decision by two companies to combine all operations, officers, structure, and other functions of the business. Who Benefits from Mergers?Mergers are meant to be mutually beneficial for the parties involved. In the case of two publicly-traded companies, a merger usually involves one company giving shareholders in the other its stock in exchange for surrendering the stock of the first company. The acquiring company continues to function, and the acquired company ceases to exist. This does not mean that the brand disappears. An example is when Kmart Holdings and Sears merged in 2004. The two corporations announced the combining Sears and Kmart into a significant new retail company named Sears Holdings Corporation. Sears Holdings is the nation’s third-largest retailer, with approximately $55 billion in annual revenues and a national footprint of nearly 3,500 retail stores in the United States. Both Kmart and Sears stores continued to operate under their brand names and identities. Kmart and Sears shareholders each approved the combination.
Read this Term, which also needs to go through regulators within the next 15 months.
XP Chief Financial Officer Bruno Constantino, talked about the development and said: “Given the immaterial overlap between XP and Modal’s clients, we expect that interesting revenue synergies and client experience enhancements will be captured.”
Meanwhile, XP CEO Thiago Maffra, also commented about development and stated: “Brazil has one of the most concentrated financial sectors globally and together we’ll be able to be even more competitive against the traditional banks. Our priority is to constantly improve the value proposition for Brazilian consumers.”
How Firms Are Adapting during Difficult Economic Conditions
The development by XP to buy Modal comes at a time when competition for strategic market advantage continues influencing merger and
acquisition
Acquisition
Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant’s service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There are many ways to acquire or to take the acquisition of property and services. How Companies Utilize AcquisitionsIn finance, the term acquisition is most often used when referring to taking control of a company. An acquisition can be either an agreed deal or a hostile takeover. Companies also may acquire units of a company, property, or other assets. An acquisition is when one business, person, or company purchases most if not of another company’s shares to gain control of that company. Buying more than 50% of a target firm’s stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company’s shareholders. In finance, there are several types of acquisitions that one speaks of when referring to Acquisitions and Mergers. A horizontal acquisition is when two companies come together with similar products/services. Conversely, a vertical acquisition means two companies join forces in the same industry, but they are at different points on the supply chain.Moreover, a conglomerate represents two companies in different industries join forces, or one takes over the other to broaden their range of services and products. Finally, a concentric acquisition occurs when companies will share customers but provide different services.
Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant’s service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There are many ways to acquire or to take the acquisition of property and services. How Companies Utilize AcquisitionsIn finance, the term acquisition is most often used when referring to taking control of a company. An acquisition can be either an agreed deal or a hostile takeover. Companies also may acquire units of a company, property, or other assets. An acquisition is when one business, person, or company purchases most if not of another company’s shares to gain control of that company. Buying more than 50% of a target firm’s stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company’s shareholders. In finance, there are several types of acquisitions that one speaks of when referring to Acquisitions and Mergers. A horizontal acquisition is when two companies come together with similar products/services. Conversely, a vertical acquisition means two companies join forces in the same industry, but they are at different points on the supply chain.Moreover, a conglomerate represents two companies in different industries join forces, or one takes over the other to broaden their range of services and products. Finally, a concentric acquisition occurs when companies will share customers but provide different services.
Read this Term activities across the financial services industry. In the first half of 2021, deals for technology and innovation continued to trigger such activities. Acquisition and divestitures are expected to continue in the upcoming months, as asset managers, insurance companies, banks, and brokerage firms seek to increase margins and efficiency, optimize cost structures, and grow top-line growth. As such, transformation is in the mind of dealmakers’ overall strategic goals. Troubled by pressure from regulators and persistent low interest rates on one hand, and by disruption from fintechs, platforms, and continued digitalization on the other hand, financial companies need to evolve to meet such challenges. A key aspect of M&A activity is likely to be the continued formation of strategic partnerships and ongoing consolidations.
Source: https://www.financemagnates.com/fintech/brazilian-brokerage-xp-to-acquire-local-investment-bank-banco-modal/