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M&A Report: E*TRADE, Truist and 3M In the News

M&A Report: E*TRADE, Truist and 3M In the News

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In keeping with our mission to provide comprehensive advertising analysis, MediaRadar puts together a report of the most important mergers and acquisitions news each week. Stay in the loop, whether you sell advertising space or focus on business development. 

This week, it’s all finance: E*TRADE invests in student loan financing, SunTrust and BB&T finally complete their merger, and 3M sells its drug delivery business to an investment group. 

E*TRADE Acquires Student Loan Startup Gradifi 

E*TRADE Financial, an online financial planning and trading platform, has acquired Gradifi. The startup provides employer benefits focused on student loans and financial wellness. 

This acquisition was valued at $30 million. 

U.S. student loan debt totals approximately $1.6 trillion as of March 2019 and is projected to increase to nearly $2 trillion by 2022. Gradifi serves to accommodate this extensive crisis by offering employers the ability to provide benefits for student loan contributions, refinancing options, and educational resources. 

E*TRADE’s acquisition positions the financial company to take advantage of the increasing demand of student loan options. 

SunTrust Banks and BB&T Complete Merger

SunTrust Banks and BB&T announced their plans for a merger of equals back in February. Over half a year later, the two banks are finally one

Now operating under the name Truist Financial, the combined companies have become the sixth-largest U.S. bank holding company, with a clientele exceeding 10 million households and operating over 2,000 branches across the nation. 

When the merger was first announced, bank officials expected around $1.6 billion annual cost reductions. Because the banks overlap in their coverage — about 740 of the banks’ branches are located within two miles of each other — the bulk of reductions will likely come from branch closures and layoffs. The transition to the full ‘Truist experience’ will occur as systems get integrated over the next two years, but clients can now use BB&T and SunTrust ATMs to make withdrawal without incurring out-of-network fees. 

3M Drug Delivery Business Being Acquired by Altaris 

The American multinational conglomerate 3M has agreed to sell its drug delivery business to Altaris for $650 million; the deal includes cash, an interest-bearing security, and a 17 percent non-controlling interest in the new company Altaris Capital is creating. 

According to the terms of the deal, 3M will retain their transdermal drug delivery business. The drug delivery branch Altaris is set to acquire earns about $380 million in annual revenue. The transaction is expected to close in the first half of 2020. 

900 3M employees are expected to join Altaris upon completion of the sale. This deal is the latest in divestments from 3M, which has also sold its bullet-resistant helmet and body armor business, its gas and flame detection business, its fiber-optics telecommunications business and its passport and identity business. 

The money raised by these divestments has been used to fund the recent $2.5 billion acquisition of Acelity, Inc. 

In Other News

These are some other notable deals and developments from the past week:

  • In a deal valued at $195 million, Sony Pictures Television has acquired the British children’s entertainment producer Silvergate Media. Silvergate currently produces eight different children’s animated series, including Peter Rabbit which has won five daytime Emmy Awards since 2014. 
  • Fortinet, a global leader in cybersecurity solutions, has acquired CyberSponse, a leading Security Orchestration, Automation, and Response (SOAR) platform provider. Fortinet serves several large scale enterprises and organizations by providing high-performance security across various segments of IT infrastructure.  
  • Dupont has signed an agreement to acquire Desalitech Ltd., a provider of closed circuit reverse osmosis (CCRO) systems. The deal is expected to close in January 2020. Dupont is a leader in water purification and separation technology including reverse osmosis, nanofiltration, ultrafiltration, ion exchange, and electrodeionization. 
  • According to Reuters, the Australian Competition and Consumer Commission (ACCC) warned that Belgium-based Anheuser-Busch InBev’s proposed $11 billion sale of its Australian operations to Japan’s Asahi Group may stifle competition in the cider and beer market. AB InBev announced in July that it is selling its Australia-based Carlton & United Breweries to Asahi as part of its plan to lower debt after acquiring SABMiller in 2016.  
  • After a wave of big name initial public offerings this year, NASDAQ is poised to raise more funds than NYSE for the first time since its fumbled Facebook IPO in 2012. As of now, a total of $34.4 billion was raised from NASDAQ-listed IPOs, while only $26.2 billion was raised at NYSE. 
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