Hot takes on Shawbrook's swoop for ThinCats

Strategy, brands and technology - and a price tag of £180m

Hello Rainmakers,

Challenger bank Shawbrook’s swoop for the specialist lender ThinCats ups their game in the fast changing business lending market.

Shawbrook, which is eyeing up a potential IPO this year, has elbowed its way into a couple of niche segments that give it a particularly strong presence and also grown its balance sheet in a way that wasn’t going to be easy to do organically in the current market.

It’s only been a few hours since the deal dropped on the markets this morning.

Shawbrook, which has tradable bonds, has its news picked up on the London Stock Exchange.

Straightaway, they are hailing it as a strategic acquisition.

I’ve been asking around all day and have pulled together a few early thoughts on the deal that is expected to complete this year, as is, a widely anticipated IPO. Let’s not forget that Shawbrook have also been linked with Metro Bank, they were in the running for Co-operative Bank and are also rumoured to have been keeping an eye on Starling. It’s all about chief executive Marcelino Castrillo building a compelling story for an IPO.

The top line consensus though is that this is primarily a deal of strategic value. It makes sense; ThinCats have successfully industrialised lending to SMEs and built a really robust fintech platform. Don’t be surprised to see Shawbrook leverage this platform to expand its presence in the SME lending market.