SNL's 2005 M&A Summary for Financial Institutions

CHARLOTTESVILLE, VA -- Aggregate deal value decreased drastically in bank and thrift whole deals this year but saw substantial gains in all other FIG industries except for insurance brokers in 2005, according to SNL Financial.

Bank and Thrift

Excluding terminated deals, bank and thrift whole deals announced this year totaled 254, slightly below last year’s mark of 266. Deal value, however, dropped 78% to $28.8 billion from $130.7 billion last year.

The largest single transaction this year was Capital One Financial Corp.’s (NYSE: COF) $5.0 billion offer for Hibernia Corp. Coming in second was Sovereign Bancorp Inc.’s (NYSE: SOV) controversial $3.6 billion offer for Independence Community Bank Corp. (NASDAQ: ICBC), which was followed closely by Wachovia Corp.’s (NYSE: WB) $3.4 billion offer for California-based Westcorp (NYSE: WES).

Offers averaged 223.3% of book compared to 213.7% a year ago. On a price to earnings basis, deals posted a median of 25.1x compared with 25.6x a year ago.

Insurance

Insurance deals announced this year amounted to 99 transactions, up from the 79 announced last year. Deal value increased 267% to $47.5 billion from $12.9 billion last year.

The largest transaction was MetLife Inc.’s (NYSE: MET) $11.5 billion offer for Travelers Life & Annuity Co./CitiInsurance International Hldgs. The second largest transaction was UnitedHealth Group Inc.’s (NYSE: UNH) $8.0 billion offer for PacifiCare Health Systems Inc. with Lincoln National Corp.’s (NYSE: LNC) $7.6 billion offer for Jefferson-Pilot Corp. (NYSE: JP) coming in at a close third.

Average price to book was 163.9% compared to 219.5% a year ago. Insurance deals had a median price to earnings ratio of 12.8x compared to 15.7x a year ago.

Insurance broker deals announced this year came in at an even 200, down from the 243 deals announced last year. Announced deal value decreased 19% to $1.2 billion from $1.4 billion announced last year.

The largest transaction was Aetna Inc.’s (NYSE: AET) $390.0 million offer for HMS Healthcare Inc. which was more than twice as much as the runner-up, Brown & Brown Inc.’s (NYSE: BRO) $175.0 million offer for Hull and Company Inc.

Financial Services

Securities and Investments deals announced this year totaled 160, on par with the 157 deals announced last year. Deal value jumped 216% to $19.1 billion from $6.0 billion announced last year.

The largest transaction was Ameritrade Holding Corp.’s (NASDAQ: AMTD) $3.9 billion offer for TD Waterhouse Group Inc. which was followed up a day later by the announcement of the second largest transaction, Legg Mason Inc.’s (NYSE: LM) $3.7 billion offer for Citigroup Inc.’s (NYSE: C) asset management business.

Price to book averaged 223.8% for Securities and Investments deals compared to 305.3% a year ago. Offers had a median price to earnings ratio of 28.3x compared to 11.9x a year ago.

Specialty Finance deals announced this year were down to 155, considerably lower than the 222 deals announced last year. Deal value, however, increased by 272% to $73.8 billion from $19.9 billion announced last year.

June was a hot month for Specialty Finance deals, the three largest Specialty Finance transactions were all announced then and all of them involved credit card companies. The largest transaction was Bank of America’s (NYSE: BAC) $35.7 billion offer for MBNA Corp. followed by Washington Mutual Inc.’s (NYSE: WM) $6.9 billion offer for Providian Financial Corp., and finally Citigroup Inc.’s $3.6 billion offer for Federated Department Stores Inc.’s $3.2 million credit card portfolio.

Offers averaged 195.0% of book compared to 182.2% a year ago. On a price to earnings basis, deals had a median of 18.5x compared to 14.2x a year ago.

Financial Technology deals announced this year improved dramatically to 246 from 164 deals last year. Deal value increased 172% to $28.6 billion from $10.5 billion.

The largest transaction was Solar Capital Corp.’s $11.0 billion offer for SunGard Data Systems Inc. Fidelity National Financial Inc.’s (NYSE: FNF) $2.1 billion offer for Certegy Inc. (NYSE: CEY) came in second and Apollo Management LP’s $1.8 billion offer for Cendant Corp.’s marketing services division rounds out the top three.

About SNL Financial

SNL collects, standardizes and disseminates all relevant corporate, financial, market, and M&A data — plus news and analysis — for the Banking, Financial Services, Insurance, Real Estate, Energy and Media & Communications industries. For more information, visit www.SNL.com.