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Regions Financial (RF) to Buy Clearsight, Ups Advisory Ability

At the heels of the recently closed buyout of Sabal Capital, Regions Financial Corp. RF has now inked a definitive agreement to acquire McLean, VA-based Clearsight Advisors, Inc. Clearsight is a preeminent merger and acquisition firm catering to clients in the technology, professional services, data and information services, and digital and technology-enabled service industries.

The acquisition marks an additional avenue for the bank to broaden its specialty capabilities as well as merger and acquisition advisory services for existing technology sector clients. Moreover, it will equip the company to attract clients seeking to leverage Regions Financial’s experience and resources, and help them attain their financial goals.

Regions Financial is leveraging Clearsight’s extensive sector knowledge to deliver independent merger and acquisition advisory services to several clients, including entrepreneurs, companies and institutional investors. Clearsight also offers financial advisory and consulting services to companies and entrepreneurs, advancing their business strategies.

The buyout is anticipated to close by 2021 end, subject to the satisfaction of customary closing norms. Terms of the deal were kept under wraps. Regions Financial intends to consolidate Clearsight into Regions Bank’s expanding Capital Markets division. The company will retain Clearsight’s headquarters in McLean, and business offices in New York City and Dallas.

Management at Regions Financial noted, “The combination of Clearsight’s sector-specific M&A and financial advisory services, and Regions’ extensive technology sector corporate finance, lending and capital markets solutions, represents a significant opportunity to deliver value for our collective client base. This, along with our commitment to world-class service and attention to detail, will help us deepen relationships and build new relationships in this space.”

Clearsight’s management remarked, “Over the last decade, Clearsight has grown to be an M&A advisory leader in the burgeoning knowledge economy. Strategically, we were seeking a partner that would help us expand our ability to provide a more fulsome suite of services and capital options for our growing client base, while identifying the right culture match for our team.”

The buyout underlines Regions Financial efforts to diversify its revenue source by offering more high-value, fee-based financial services and originations. The move is in line with the company’s efforts to expand its business operations on the back of investments in varied product offerings and inorganic activities.

Mirroring this, Regions Financial closed the acquisition of Sabal Capital earlier this month to improve agency multi-family and non-agency lending capabilities.Sabal has been integrated into Regions Financial’s Real Estate Capital Markets platform. In October, the company completed the previously announced deal to acquire the specialized home improvement lender, EnerBank USA, from its parent, CMS Energy Corporation. The move expanded its home-lending products, adding $3.1 billion in loans to consumers.

As the bank continues to explore opportunities for bolt-on acquisitions, expand its services and enhance client experiences, we believe that such endeavors will diversify its revenue streams and support long-term growth prospects.

Over the past six months, shares of Regions Financial have gained 7.1% compared with 2.5% growth of the industry.

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Currently, Regions Financial carries a Zacks Rank #3 (Hold). 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 similar move to enhance mergers and acquisitions advisory services’ competencies in the digital-infrastructure sector, Citizens Financial Group, Inc. CFG recently announced a definitive agreement to acquire substantially all assets of DH Capital LLC. DH Capital is a New York-based private investment banking firm catering to companies in the Internet infrastructure, software and next-generation IT services, and communications sectors.

The move marks Citizens Financial’s third acquisition over the past four months to augment its corporate advisory team. In September, CFG closed the buyout of Willamette Management Associates and it acquired JMP Group in November.

First Financial Bancorp. FFBC will acquire the fourth-largest independent equipment financing platform in the United States, Summit Funding Group. The deal completion, subject to customary closing conditions, is expected in the fourth quarter of this year.

The acquisition of Summit is expected to be accretive to First Financial’s earnings per share by mid-single digits in 2023 (the first year post-integration). Thereafter, on a run-rate basis, the deal is expected to be accretive to FFBC’s earnings by low-double digits.

U.S. Bancorp’s USB primary subsidiary U.S. Bank completed the deal to acquire PFM Asset Management LLC. The acquisition was carried out through U.S. Bancorp Asset Management. The deal to acquire PFM Asset Management was announced this July.

U.S. Bancorp’s several acquisitions over the past years have enabled the company to foray into untapped markets and fortify its footprint in existing geographies.


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