This week, private equity powerhouse, TPG, agreed to invest $353 million for a 23% equity stake in Bradford & Bingley Plc., an ailing UK mortgage broker. In fact, it looks like this deal could be a beachhead for many more transactions in the UK financial services sector (this is according to a piece in the Telegraph).
Europe also binged on credit over the past few years, and things are starting to crack. In other words, there will be a big need for capital infusions to shore up balance sheets.
A variety of financial services companies in the UK are selling at distressed levels (that is, large discounts to book values). For example, mortgage player, Paragon, trades at a third of its book value. No doubt, there are rumors that the company is attracting private equity interest.
Of course, TPG is not the only firm licking its chops. It looks like The Blackstone Group LP (NYSE: BX), JC Flowers and KKR are also prepping for some deals.
Besides Paragon, it appears that Alliance & Leicester and Northern Rock are in play for private equity deals.
Tom Taulli is the author of various books, including The Complete M&A Handbook
