On November 29, FBN Holdings Plc announced its full divestment from FBNQuest Merchant Bank Limited, ending nearly a decade of ownership. The bank was acquired by EverQuest Acquisition LLP, a special-purpose consortium formed earlier in 2024 to complete the transaction.
While neither party has disclosed the cost of the deal, publicly available information provides enough context to understand the acquisition and estimate its potential value.
FBNQuest Merchant Bank began in 1995 as Kakawa Discount House. Discount houses were financial intermediaries that traded treasury bills, commercial papers, and other short-term securities.
Discount houses were popular in the 1990s, as they helped to support liquidity in the money market and stabilise financial institutions at a time when Nigeria’s financial markets were still developing.
Kakawa Discount House expanded into advisory and asset management services. This growth led to a change of name, first to Kakawa Asset Management and later to FBNQuest Merchant Bank after FBN Holdings acquired the company in 2015. The acquisition allowed FBN Holdings to strengthen its investment banking and securities trading capabilities.
It also helped the group participate in stockbroking through FBNQuest Securities, now First Securities Brokers Limited and in wealth and asset management through FBNQuest Asset Management, now First Asset Management. These units have now been reorganised as separate entities within the group.
Merchant banks operate differently from commercial banks. They do not take public deposits. Instead, they offer capital raising, advisory services, structured finance, securities dealing, and wealth management.
In simple terms, a merchant bank functions as a corporate finance specialist. It helps institutions raise funds, manage investments, and execute major financial transactions.
EverQuest Acquisition LLP was created in June 2024 for the single purpose of acquiring FBNQuest Merchant Bank. The consortium consists of Custodian Investment Plc, EverCorp Industries, and Aion Investments. Each partner brings a different strength to the table, and together they signal a coordinated push into the financial services space.
Custodian Investment’s participation marks a significant move toward expanding its financial services portfolio. The company already operates across insurance, pensions, trusteeship, real estate, hospitality and stockbroking. Entering investment banking gives Custodian a more complete and competitive financial services structure.
EverCorp Industries adds another interesting layer. The company was incorporated in 2023 and has moved quickly into the Nigerian corporate landscape. It holds an 86.5 percent stake in Champion Breweries. It also acquired Old Mutual Nigeria, which now operates as emPLE, and it has expanded into the energy sector through its subsidiary energy& LLP.
Another interesting aspect of EverCorp is its aggressive corporate finance moves across different sectors. These moves include Champion Breweries’ acquisition of the Bullet Energy Drink from Sunmark in the UK. Recently, energy& acquired an equity stake in LPG producer, Falcon Corporation, a move that deepens Evercorp’s reach in the energy sector.
Essentially, EverCorp’s involvement in the FBNQuest deal alongside Custodian suggests a strategy to build a stronger financial base for its growing network of investments.
The third partner in the EverQuest consortium, Aion Investments, is linked to the Managing Director of FBNQuest Merchant Bank, Kayode Akinkugbe. Before then, he served as the Managing Director of FBN Capital.
FBNQuest Merchant Bank enters the acquisition with strong financials. The bank reported total assets of N497.9 billion in 2024. It recorded net assets of N40 billion. It also posted a net profit of N11.4 billion, which represents a 58 percent increase from the N7.2 billion recorded in 2023. The bank held a cash balance of N191 billion at the end of the year. This is a very strong liquidity position for an institution of its size.
These results show a stable and profitable business with significant liquidity. They also highlight why the bank would attract a buyer that wants an established investment banking platform.
The parties involved have not disclosed the value of the transaction. However, typical valuation methods provide a reasonable estimate. Merchant banks of this size in emerging markets often sell for one to one and a half times their book value. With FBNQuest’s book value at N40 billion, this suggests a range of N40 billion to N60 billion.
Another method uses earnings multiples. High-performing investment banks usually attract valuations of six to ten times their annual profit. Using FBNQuest’s profit of N11.4 billion in 2024, this gives a range of N68 billion to N114 billion. The bank’s strong liquidity position, especially the N191 billion cash balance, suggests that the final value would be closer to the upper end of this range.
Based on these metrics, the estimated value of the transaction likely falls between N70 billion and N110 billion, with a midpoint around N90 billion.