Regions Financial Corp. (NYSE: RF) has inked a deal to acquire leading mergers and acquisitions firm Clearsight Advisors to further strengthen its presence in the potentially-growing Capital Markets segment. The financial terms of the deal have been kept under wraps.
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Following the news, shares of the U.S.-based bank holding company were down 3.1% to close at $21.27 on December 17.
Benefits of the Acquisition
Clearsight Advisors delivers independent M&A advisory services as well as financial advisory and consulting services to entrepreneurs, companies, and institutional investors. It serves clients across various industries including technology, professional services, data and information services, and digital and technology-enabled services industries.
With the acquisition of Clearsight Advisors, Regions Financial aims to bolster its specialty capabilities as well as its M&A advisory services to serve both existing technology sector clients as well as new clients. It will also lead to further revenue diversification through big-ticket, fee-based financial services.
The acquisition is expected to close by the end of 2021, subject to certain regulatory approvals.
Management Weighs In
Regions Financial Corp CFO, David Turner, commented, “Our strategic plan at Regions includes identifying areas where we can expand specialty capabilities to offer more solutions to clients while growing our customer base”.
He further added, “Regions’ agreement to acquire Clearsight Advisors, as well as our acquisitions of Sabal Capital Partners, home improvement lender EnerBank, Ascentium Capital, and others, reflect this strategy in action. As a result, Regions is even better positioned to drive positive results for a wider range of clients as we build on our long-term growth.”
Analysts Recommendation
On December 6, Morgan Stanley analyst Betsy Graseck increased the price target on Regions Financial to $30.00 (41% upside potential) from $26.00 and reiterated a Buy rating.
The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 9 Buys and 4 Holds. At the time of writing, the average Regions Financial price target was $26.71, which implies 25.6% upside potential to current levels.
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