This edition of the Bermuda Public Companies Update summarises significant transactions involving Bermuda companies listed on the New York Stock Exchange and Nasdaq in the second half of 2022.
Global market update
The second half of 2022 proved to be as challenging as the first half had been for global markets. Worldwide financial uncertainty continued, fed by a number of parallel and often related ongoing crises: significant worldwide inflation, a global monetary tightening cycle, a strong U.S. dollar, a war in Europe, energy supply issues and the ongoing turmoil in China’s property market.
Despite a handful of notable deals, the restructuring market continued its relatively quiet trend through the end of 2022. We expect that trend to reverse in the first half of 2023, however, now that the expansionary fiscal stimulus of the past three years has ended, and corporate restructuring and M&A will likely increase and to remain strong into 2024.
Debt and equity markets were also challenged by the same factors in 2022, and there was a global drop in IPO numbers and in capital raised. In the Americas, IPO volumes fell to the lowest level since 2009, and values hit a 20-year low. Market watchers don’t expect that trend to change anytime soon.
Bermuda companies update
Bermuda’s markets generally mirrored the global trends, although there were still a number of big deals involving Bermuda-based companies. One such transaction was the acquisition of PartnerRe Ltd. (NYSE:PRE) by Covéa Mutual Insurance Group Company for US$9 billion. This deal showed confidence in Bermuda’s public insurance and reinsurance companies, which fared well overall in 2022. Despite the global financial headwinds, insurance saw continued growth in the long-term and life sector, strong performance in the catastrophe bond market and a number of key group reorganisations.
The investment management company Invesco Ltd. (NYSE:IVZ) was involved in two separate multibillion dollar deals in H2 2022: in July it was part of a consortium that sold commercial kitchen equipment manufacturer Welbilt, Inc. to the Italian foodservice company Ali Group S.r.l. for US$3.4 billion; in October it was among the shareholders that entered an agreement to sell the remainder of software security developer KnowBe4, Inc. (NasdaqGS:KNBE) to Vista Equity Partners Management, LLC for US$4.2 billion.
Another notable deal was the agreement in October by a strategic consortium led by Cameco Corporation (NYSE:CCJ), Brookfield Renewable Partners L.P. (TSX:BEP.UN; NYSE:BEP) and Brookfield Global Transition Fund I to acquire Westinghouse Electric Company LLC from Brookfield Business Partners L.P. (NYSE:BBU) and others for US$7.9 billion.
During the second half of 2022, Bermuda companies raised a total of US$21.6 billion and market capitalisation stands at US$200 billion. Sizeable equity offerings included:
- Software and technology provider Wejo Group Limited (NasdaqGS:WEJO) completed a private placement of shares in July for gross proceeds of US$15.9 million.
- Algerian investment firm FNI – Fonds National d’Investissement acquired a 47.57% stake in Optimum Telecom Algérie S.P.A from VEON Ltd. (NasdaqGS:VEON) in August for approximately US$682 million.
- Flex LNG (OB:FLNG; NYSE:FLNG) entered into an Equity Distribution Agreement with Citigroup Global Markets Inc. and Barclays Capital Inc. in November, under which they may offer and sell ordinary shares having an aggregate offering price of up to US$100 million. These at-the-market offerings are specific to the US market and will only be available on the NYSE.