17 June 2020

60-second CFIUS: CFIUS Clears Another Deal: Huatai Securities – OBS Financial Services

CFIUS cleared another China acquisition. The clearance came in late February but was only publicly announced by the NYSE-listed buyer in its recent SEC filing.

The deal involves the acquisition of WBI OBS Financial, LLC, the parent of OBS Financial Services. The acquired company is a technology company offering “investment, sales, marketing, operations, and technology solutions” to financial institutions, retirement plan advisors, bank trust officers and others. OBS generates model portfolios, compliance materials, and trading assistance. The buyer was AssetMark Financial Holdings, Inc. (NYSE:AMK), which is 70.3% owned by the PRC securities house, Huatai Securities Co., Ltd.

This is the second clearance that has been publicly disclosed in the last two months. The other was the $1.8 billion acquisition of Kemet Corporation, a US manufacturer of capacitors, such as; tantalum, aluminum, multilayer ceramic, film, paper, polymer electrolytic, and supercapacitors (www.kemet.com), by the Taiwanese company Yageo (www.yageo.com). Yageo is not a PRC company, but it has close ties to China, including three manufacturing facilities. See our post on that clearance here.

This is also at least the second clearance for Huatai Securities’ US-listed subsidiary AssetMark. CFIUS cleared the company’s acquisition of Global Financial Private Capital in April 2019.

The overall clearance rate for China deals during the Trump Administration still hovers around 60%, although precise numbers are impossible to know because actions by CFIUS are not public. See our post on the clearance rate here. Still, these two clearances are evidence that the door is not closed, even in the technology and financial sectors.

The 60-second takeaway is that the door is not closed, despite the current trade tensions. The right deals, handled the right way, can still be closed.

A Guide to Doing Business in China

We explore the key issues being considered by clients looking to unlock investment opportunities in the People’s Republic of China.

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