On a conference call in May, Principal said it has US$1.9bn of total excess capital, of which US$1.1bn was at the holding company. The company also generates US$500mn a year of free capital post dividends, and had planned to deploy only US$700m in 2011 - of which $500m is already deployed - and keep the rest as a cushion.
Devlin believes Principal will generate an additional US$500mn in 2012 and, therefore, has the potential to use up to US$1bn of its own capital in any transaction.
"Its debt to total capital leverage is also only 15%, compared to MetLife's 25%, and if it raised its debt to total capital to 25%, it would have an additional US$1.2bn of debt leverage. The remaining acquisition price would have to be raised as fresh equity,"
"We estimate that the assets for sale made US$260mn in earnings in 2010, equivalent to a multiple of 11.5x. ING's Latin American assets made US$280mn in 2010, but we estimate that one-third of these earnings are from its joint venture in Brazil, which we believe is not for sale,"
Even considering Principal's 8.3x and MetLife's 6.9x multiples, the ING deal is not expensive for an emerging market or Latin American retirement operation.
「我々は、2010年には売上資産によって2億6千万ドル、つまり11.5倍の利益を得たと推測しています。ING社のラテンアメリカでの資産は2010年には2億8千ドルです
。しかしそれは利益中3分の1がブラジルでの共同事業から得たものであり、売買用の商品ではないと考えています。」
プリンシパル社の8.3倍、メットライフ社の6.9倍を考慮しても、INGの割合は新興市場やラテンアメリカの定年運用としてはさほど高くない。
"Furthermore, given the overlap in ING's largest operations, specifically Chile and Mexico, we believe there could be US$30mn of after-tax annual cost savings, which would reduce the multiple to 10.3x operating earnings including expense synergies," he said.
In March, ING announced it was reviewing "strategic options" for its insurance and pension operations in Latin America, including a possible sale, to repay state aid money received at the height of the 2008 credit crisis.
In November 2010, ING announced that the base-case scenario for this divestment is two IPOs - one Europe-led IPO combined with strong possibilities in emerging markets and one US-focused IPO with a leading franchise in retirement services - but it was still undecided if its Latin American units were to be included in the transactions.
"ING could still carry out an IPO, but given this highly volatile market, I think they would be better off selling it to a trade buyer," Devlin said.
"INGはまだIPOを執行することができたが、この揮発性の市場を見る限りでは、私はそれをトレードバイヤーに売り渡すことが彼らにとって良いことだと考える"、とDevlinは言った。
