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Moody's (MCO) to Expand in Africa, Buy Global Credit Rating
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Moody’s Corporation (MCO - Free Report) plans to further expand in Africa and has agreed to acquire 51% stake in Global Credit Rating Company Limited. The transaction, still subject to customary regulatory approvals, is expected to close in second-quarter 2022.
While the terms of the transaction were not disclosed, it will be funded with cash on hand. The deal is not expected to impact Moody’s 2022 financial results significantly.
Global Credit Rating, a leading rating agency in Africa, has its presence across the continent, including in countries like Nigeria, South Africa, Kenya, Senegal and Mauritius. The firm provides its expertise in the African financial market with credit insight in different sectors and economies. Following the closure of the transaction, there will be no change in the firm’s operations. It will continue to develop its own rating methodologies, issue its own credit ratings and maintain a separate management team.
Combining Global Credit Rating’s solid footprint in the continent with Moody’s global reach will bolster latter’s presence in the high-growth markets.
Marc Joffe, CEO of Global Credit, said, "This transaction will enable us to build on our deep local market insights and a quarter-century of growth across the continent. It will also provide the opportunity to further develop solutions that meet a range of customer needs, including credit ratings, credit risk solutions, and ESG capabilities."
In its plan to expand in South Africa, Moody’s expects local strategic support from Global Credit Rating. This will be made possible with substantial equity participation and representation on the Global Credit Rating South Africa board.
Over the past several years, Moody’s has been strengthening its footprint and credit rating solutions through strategic acquisitions/partnerships. In 2021, the company acquired PassFort Limited, Bogard AB, RMS and Cortera, among others, while announcing plans to acquire 360kompany AG. Its inorganic growth efforts are expected to help in further diversification of revenues and expand its global reach.
Over the past year, shares of Moody’s have rallied 26.7% compared with 15.7% growth of the industry.
Several companies from the finance sector are undertaking consolidation efforts to improve competencies in a bid to counter the low-interest-rate environment.
In a move to enhance M&A advisory service competencies in the digital-infrastructure sector, Citizens Financial Group, Inc. (CFG - Free Report) announced a definitive agreement to acquire substantially all assets of DH Capital LLC.
The move marks Citizens Financial’s third acquisition over the past few months in order to augment its corporate advisory team. In September 2021, CFG had closed the buyout of Willamette Management Associates and had acquired JMP Group in November.
Velocity Financial, Inc. (VEL - Free Report) acquired the majority stake in Century Health & Housing Capital. Century, licensed Ginnie Mae issuer and servicer, offers government-insured Federal Housing Administration mortgage financing for multi-family housing, senior housing and long-term care/assisted living facilities.
The acquisition will help Velocity Financial leverage Century’s well-established platform and diversify revenues with the addition of fee-based origination and servicing income. This, along with VEL’s national origination footprint, offers ample development scope for origination growth and the expansion of commercial mortgage product offerings.
RBB Bancorp (RBB - Free Report) entered a definitive agreement to buy Gateway Bank in a cash transaction valued at $22.9 million in a bid to penetrate the strategic San Francisco Bay Area. The buyout will expand RBB Bancorp’s physical presence in six of the nine target markets of Gateway Bank and provide a profitable base to extend the advancement the latter has made in the Bay Area.
The deal is also in line with RBB Bancorp’s aim to establish its relationship-based banking model in the region for the community.
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Moody's (MCO) to Expand in Africa, Buy Global Credit Rating
Moody’s Corporation (MCO - Free Report) plans to further expand in Africa and has agreed to acquire 51% stake in Global Credit Rating Company Limited. The transaction, still subject to customary regulatory approvals, is expected to close in second-quarter 2022.
While the terms of the transaction were not disclosed, it will be funded with cash on hand. The deal is not expected to impact Moody’s 2022 financial results significantly.
Global Credit Rating, a leading rating agency in Africa, has its presence across the continent, including in countries like Nigeria, South Africa, Kenya, Senegal and Mauritius. The firm provides its expertise in the African financial market with credit insight in different sectors and economies. Following the closure of the transaction, there will be no change in the firm’s operations. It will continue to develop its own rating methodologies, issue its own credit ratings and maintain a separate management team.
Combining Global Credit Rating’s solid footprint in the continent with Moody’s global reach will bolster latter’s presence in the high-growth markets.
Marc Joffe, CEO of Global Credit, said, "This transaction will enable us to build on our deep local market insights and a quarter-century of growth across the continent. It will also provide the opportunity to further develop solutions that meet a range of customer needs, including credit ratings, credit risk solutions, and ESG capabilities."
In its plan to expand in South Africa, Moody’s expects local strategic support from Global Credit Rating. This will be made possible with substantial equity participation and representation on the Global Credit Rating South Africa board.
Over the past several years, Moody’s has been strengthening its footprint and credit rating solutions through strategic acquisitions/partnerships. In 2021, the company acquired PassFort Limited, Bogard AB, RMS and Cortera, among others, while announcing plans to acquire 360kompany AG. Its inorganic growth efforts are expected to help in further diversification of revenues and expand its global reach.
Over the past year, shares of Moody’s have rallied 26.7% compared with 15.7% growth of the industry.
MCO currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Growth Efforts by Other Firms
Several companies from the finance sector are undertaking consolidation efforts to improve competencies in a bid to counter the low-interest-rate environment.
In a move to enhance M&A advisory service competencies in the digital-infrastructure sector, Citizens Financial Group, Inc. (CFG - Free Report) announced a definitive agreement to acquire substantially all assets of DH Capital LLC.
The move marks Citizens Financial’s third acquisition over the past few months in order to augment its corporate advisory team. In September 2021, CFG had closed the buyout of Willamette Management Associates and had acquired JMP Group in November.
Velocity Financial, Inc. (VEL - Free Report) acquired the majority stake in Century Health & Housing Capital. Century, licensed Ginnie Mae issuer and servicer, offers government-insured Federal Housing Administration mortgage financing for multi-family housing, senior housing and long-term care/assisted living facilities.
The acquisition will help Velocity Financial leverage Century’s well-established platform and diversify revenues with the addition of fee-based origination and servicing income. This, along with VEL’s national origination footprint, offers ample development scope for origination growth and the expansion of commercial mortgage product offerings.
RBB Bancorp (RBB - Free Report) entered a definitive agreement to buy Gateway Bank in a cash transaction valued at $22.9 million in a bid to penetrate the strategic San Francisco Bay Area. The buyout will expand RBB Bancorp’s physical presence in six of the nine target markets of Gateway Bank and provide a profitable base to extend the advancement the latter has made in the Bay Area.
The deal is also in line with RBB Bancorp’s aim to establish its relationship-based banking model in the region for the community.