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KeyCorp Expands Healthcare Advisory, to Buy Cain Brothers
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KeyCorp (KEY - Free Report) , through it’s the corporate and investment banking unit, KeyBanc Capital Markets Inc. signed a deal to acquire Cain Brothers & Company, LLC. The financial terms of the deal, expected to close in late 2017, were not disclosed. The company aims to expand its existing healthcare investment banking with this buyout.
New York-based Cain Brothers is one of the leading “healthcare focused investment banking and public finance firm.” Following the completion of the transaction, Rob Fraiman, President and CEO of Cain Brothers, will be the head of the healthcare corporate and investment banking business of KeyBanc Capital Markets.
Notably, the transaction still requires regulatory approvals and is subject to customary closing conditions.
A Good Expansion Strategy for KeyCorp
Healthcare is one of the largest sectors in the United States and there is a growing need for distinctive capabilities. Also, the sector is expected to grow faster than the U.S. economy over the next several years, as healthcare always remains a priority, irrespective of the economic environment.
Also, KeyCorp’s plan to become a leading corporate and investment bank seems to be one of the reasons for buying Cain Brothers. The deal presents an opportunity to supplement KeyCorp's capabilities and leverage its network.
The co-head of Key Corporate Bank and President of KeyBanc Capital Markets, Randy Paine said, “This combination brings Key's expanded capabilities together with Cain Brothers' deep healthcare advisory and public finance practice, along with a shared client-focused culture embedded in each firm."
Hence, upon completion, the transaction is likely to lead to further improvement in Keycorp’s investment banking revenues. For the six months ended Jun 30, 2017, the company witnessed 55% year-over-year surge in investment banking and debt placement fees.
Over the past year, shares of KeyCorp have rallied 47.2%, outperforming the industry’s gain of 34.2%.
Other than KeyCorp, Capital One Financial Corporation (COF - Free Report) capitalized on the tremendous growth potential in the healthcare sector by acquiring General Electric Company’s (GE - Free Report) healthcare-related loans and its Healthcare Financial Services business in December 2015. (Read more: Capital One Closes Deal to Buy GE's Healthcare Lending Unit).
Currently, KeyCorp carries a Zacks Rank #3 (Hold).
A better-ranked banking stock in the same industry is Comerica Incorporated (CMA - Free Report) . The company’s shares have risen 6.5% over the last three months. The Zacks Consensus Estimate for the company for the current year was revised 3.7% upward, in the last 30 days. The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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KeyCorp Expands Healthcare Advisory, to Buy Cain Brothers
KeyCorp (KEY - Free Report) , through it’s the corporate and investment banking unit, KeyBanc Capital Markets Inc. signed a deal to acquire Cain Brothers & Company, LLC. The financial terms of the deal, expected to close in late 2017, were not disclosed. The company aims to expand its existing healthcare investment banking with this buyout.
New York-based Cain Brothers is one of the leading “healthcare focused investment banking and public finance firm.” Following the completion of the transaction, Rob Fraiman, President and CEO of Cain Brothers, will be the head of the healthcare corporate and investment banking business of KeyBanc Capital Markets.
Notably, the transaction still requires regulatory approvals and is subject to customary closing conditions.
A Good Expansion Strategy for KeyCorp
Healthcare is one of the largest sectors in the United States and there is a growing need for distinctive capabilities. Also, the sector is expected to grow faster than the U.S. economy over the next several years, as healthcare always remains a priority, irrespective of the economic environment.
Also, KeyCorp’s plan to become a leading corporate and investment bank seems to be one of the reasons for buying Cain Brothers. The deal presents an opportunity to supplement KeyCorp's capabilities and leverage its network.
The co-head of Key Corporate Bank and President of KeyBanc Capital Markets, Randy Paine said, “This combination brings Key's expanded capabilities together with Cain Brothers' deep healthcare advisory and public finance practice, along with a shared client-focused culture embedded in each firm."
Hence, upon completion, the transaction is likely to lead to further improvement in Keycorp’s investment banking revenues. For the six months ended Jun 30, 2017, the company witnessed 55% year-over-year surge in investment banking and debt placement fees.
Over the past year, shares of KeyCorp have rallied 47.2%, outperforming the industry’s gain of 34.2%.
Other than KeyCorp, Capital One Financial Corporation (COF - Free Report) capitalized on the tremendous growth potential in the healthcare sector by acquiring General Electric Company’s (GE - Free Report) healthcare-related loans and its Healthcare Financial Services business in December 2015. (Read more: Capital One Closes Deal to Buy GE's Healthcare Lending Unit).
Currently, KeyCorp carries a Zacks Rank #3 (Hold).
A better-ranked banking stock in the same industry is Comerica Incorporated (CMA - Free Report) . The company’s shares have risen 6.5% over the last three months. The Zacks Consensus Estimate for the company for the current year was revised 3.7% upward, in the last 30 days. The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.
Learn more >>