The combination makes CACEIS a leading asset service provider in the Netherlands and allows KAS BANK to export its expertise in servicing institutional investors such as pension funds and insurance companies to all the European markets CACEIS is currently servicing. CACEIS’ pan-European ambition is therefore confirmed, with a reinforced position in the Netherlands, a major country in Europe for financial activities, that will serve its clients’ international development strategy. The acquisition is expected to create value through substantial potential synergies.
25 Feb 2019
- KAS BANK and CACEIS have reached conditional agreement on a recommended all-cash public offer by CACEIS for KAS BANK of EUR 12.75 per Security (the Offer Price), valuing KAS BANK at EUR 188 million.
- The Offer represents a premium of 110% over the closing price of KAS BANK on Friday, 22 February 2019 and 111% over the average volume weighted price for the 3 months prior to and including that date.
- The Managing Board and Supervisory Board of KAS BANK unanimously support and recommend the Offer.
- KAS BANK and CACEIS have agreed on an integration plan and non-financial covenants for the period after completion of the Offer.
- CACEIS will finance the transaction from its own funds.
- The Offer is expected to be completed in the third quarter of 2019 and is subject to customary conditions, including approvals from the Dutch Central Bank and European Central Bank.
Benefits of combining the businesses
- CACEIS, part of Crédit Agricole S.A., is a European leader in asset servicing and one of the major players worldwide. As of 31 December 2018, CACEIS had EUR 2,633 billion in assets under custody and EUR 1,695 billion in assets under administration.
- KAS BANK is a leading specialist in the field of custody and administration services for institutional investors and financial institutions in the Netherlands, also with local presence in Germany and the United Kingdom. As of 31 December 2018, KAS BANK had EUR 197 billion in assets under custody and EUR 191 billion in assets related to investment accounting, including AIFMD assets.
- KAS BANK and CACEIS are complementary. Both institutions are involved in the same activities, but in different markets, targeting the institutional investors and financial institutions segments and focusing on the development of new technologies and digital processes.
- The combination of CACEIS and KAS BANK (the “Combination”) will provide the operations of KAS BANK with access to critical size in terms of balance sheet, boost KAS BANK’s competitive strength and position KAS BANK as the combination’s global centre of excellence for pension fund services.
- Acquiring KAS BANK will make CACEIS one of the leading parties in the Dutch market, with a clear opportunity to further grow its client base. In addition, CACEIS will further strengthen its product range and competitiveness with pan European institutional investors.
Paris, France and Amsterdam, the Netherlands, 25 February 2019 – KAS BANK, a leading specialist in the field of custody and administration services for institutional investors and financial institutions in the Netherlands, Germany and the UK, and CACEIS, a European leader in asset servicing and one of the major players worldwide, jointly announce that they have reached conditional agreement on a recommended public offer (the "Offer") to be made by CACEIS for all issued and outstanding ordinary securities in the capital of KAS BANK (the "Securities") for EUR 12.75 in cash per security (the "Offer Price"), representing a total consideration of EUR 188 million, subject to the terms and conditions to be set out in the offer memorandum. The offer memorandum is expected to be submitted to the AFM in the second quarter of 2019.
In connection with the announcement of the Offer, KAS BANK today, in a separate press release, also published its annual results over 2018 (full year).
Sikko van Katwijk, Chairman of the Managing Board of KAS BANK said: “Founded in 1806, KAS BANK has developed from a ‘kassiersbedrijf’ to a leading Dutch administration bank. The agreement we reached today marks the start of a new era for all of us. Teaming up with CACEIS increases our competitive strength and enhances our investment and innovation power in a market where scale is an increasingly important factor. Our Dutch, German and UK clients will benefit from the critical size with more than EUR 2.8 trillion assets under custody, the solid capital position and the extended product range this combination will bring. Our staff will benefit from this improved positioning as well as from enhanced career opportunities within the combination. Our conversations with CACEIS have strengthened our belief that a combination of CACEIS and KAS BANK puts our organisation in trusted hands. The Supervisory Board and the Managing Board of KAS BANK believe that a combination of KAS BANK and CACEIS is beneficial for KAS BANK and all of its stakeholders.”
Jean François Abadie, CEO of CACEIS: “With the announcement today, we significantly upgrade our position in the Dutch market. In addition, CACEIS will further strengthen its expertise in servicing institutional investors such as pension funds and insurance companies, in order to distribute these services on a global basis. The combination is anticipated to create value for our shareholders and will broaden and deepen our offering in Europe. We are convinced that the Offer is in the interests of both companies’ stakeholders.
The Offer is in line with the investment criteria of the Crédit Agricole S.A. group with, in particular, an attractive return on investment. The prudential impact is negligible at group level.”
The Dutch market for asset servicing is attractive due to its asset volume, complexity and high pension savings to GDP ratio. The market is known for its pension funds, private equity and real estate funds among others, resulting in a significant size. KAS BANK is a local champion, with an expertise in servicing institutional investors. For KAS BANK’s business, being part of a large and well capitalised player, revenues are expected to grow while costs synergies will lead to increased profitability.
Both parties believe that the Combination will lead to an enhanced positioning of CACEIS as service provider to European institutional investors. The extensive knowledge and expertise of CACEIS with respect to additional services will be available to Dutch investors such as private equity funds, real estate companies and other professional investors. The unparalleled strength of CACEIS’ parent company, Crédit Agricole, will offer a solid financial position, business continuity and support business development, evolving KAS BANK into CACEIS' Dutch branch.
The parties believe that the Combination has several strategic benefits including:
- Excellent complementarity in clients, markets and knowledge;
- Centred around client empowerment and operational excellence;
- Data driven and innovative organisations;
- Digitally oriented European asset servicing company;
- Comparable corporate values.
Support and recommendation from the Managing Board and the Supervisory Board
This announcement follows constructive interactions between the companies including a period of due diligence. Consistent with their fiduciary responsibilities, the Supervisory Board and Managing Board of KAS BANK, with the support of their financial and legal advisors, have given careful consideration to all aspects of the Offer, including strategic, financial, operational and social points of view.
KAS BANK formed a transaction committee consisting of Mr Peter Borgdorff, Chairman of the Supervisory Board, Mr Sikko van Katwijk, chairman of the Managing Board, Mr Mark Stoffels, CFRO and Mr Jaap Witteveen, COO. Together with their financial and legal advisors, they have monitored the process and discussed the intended Offer as well as the considerations underlying the key decisions and resolutions in connection therewith. On basis of the deliberations and findings in the transaction committee the Management Board made its decisions, under the supervision by the Supervisory Board. The Supervisory Board has held various meetings with and without the members of the Managing Board present.
After due and careful consideration, having taken the interests of all stakeholders into account, the Supervisory Board and the Managing Board of KAS BANK unanimously conclude that the Offer is in the long term interest of KAS BANK, the sustainable success of its business and clients, employees, holders of Securities and other stakeholders, and have decided to fully support and recommend the Offer to the holders of Securities and furthermore recommend the holders of Securities to vote in favour of the resolutions relating to the Offer at the upcoming Extraordinary General Meeting of Shareholders (EGM). The support and recommendation is subject to the terms and conditions of the merger protocol entered into by KAS BANK and CACEIS and completion of the consultation process with the works council of KAS BANK.
On 24 February 2019, Rabobank issued a fairness opinion to the Managing Board and the Supervisory Board of KAS BANK and on 24 February 2019 ABN AMRO issued a fairness opinion to the Supervisory Board of KAS BANK stating that as of such date, based upon and subject to the factors and assumptions set forth in each of the opinions, that the Offer Price is fair, from a financial point of view, to the holders of Securities. The full text of the fairness opinions will be included in KAS BANK's position statement.
CACEIS values the interests of all stakeholders of KAS BANK, including clients, employees, shareholders, governmental organisations, suppliers, partners and others, and recognises the corporate identity of KAS BANK based on a legacy built up over more than two centuries. KAS BANK and CACEIS have agreed to non-financial covenants with respect to the business, employees, governance of KAS BANK and the integration of KAS BANK within CACEIS, which will apply during the period starting on the settlement date and ending one year after the transformation into a branch of CACEIS.
CACEIS supports the strategy of KAS BANK's business. KAS BANK will act as CACEIS' global centre of excellence for pension fund business, defending, expanding and innovating CACEIS's pension fund offering in the Netherlands and across other international markets. KAS BANK will operate as CACEIS' Dutch business base, keeping the client base materially intact and respecting and improving the client service levels.
The existing rights, benefits, pension rights, (collective) agreements and social plan applicable to the employees of KAS BANK will be respected or replaced with equivalent arrangements. Also, the existing arrangements with the works council, trade unions and employee consultation processes will be respected. CACEIS will aim to ensure that the employees of KAS BANK have increased career opportunities, personal development and training.
KAS BANK will evolve into the CACEIS' Dutch branch, who will maintain local Dutch management and expertise. CACEIS will maintain and respect the operating of the Managing Board and Supervisory Board until the Dutch branch has been launched successfully.
The integration is aimed at strengthening KAS BANK's local product and service offering to all its clients while using CACEIS's centres of excellence in the most efficient way. CACEIS will aim to avoid redundancies wherever it can and respect the agreed social plan of KAS BANK in case of redundancies.
Composition of the boards
Under the envisaged new ownership, Mr Sikko van Katwijk, Chairman of the Managing Board since 2015, and Mr Mark Stoffels, CFRO since 2016, and Mr Jaap Witteveen, COO since 2014 will continue in their current position in the Managing Board of KAS BANK. Following completion of the transaction, the Supervisory Board of KAS BANK, subject to the approval by the EGM and regulatory approval, will consist of seven members of which four new members will be nominated by CACEIS. Three members of the Supervisory Board will continue.
Financing of the Offer
CACEIS will finance the transaction from its own funds and will at the settlement of the Offer be able to pay the aggregate Offer Price and to comply with all its financial obligations.
KAS BANK and CACEIS will seek to obtain all necessary regulatory approvals and competition clearances as soon as practicably possible. CACEIS intends to publish an offer memorandum and launch the Offer in the second quarter of 2019.
KAS BANK will hold the EGM at least 6 business days before the closing of the offer period. Based on the required steps and subject to necessary approvals, the transaction is currently expected to close in the third quarter of 2019.
KAS BANK is advised by Rabobank as financial advisor and Stibbe as legal advisor.
CACEIS is advised by Crédit Agricole CIB as financial advisor and Clifford Chance as legal advisor.
 Based on 15,699,017 securities issued, minus 921,934 treasury shares.
Download the full press release here.