Firm Returns Weekly - Aviva to acquire Optiom, David Zaslav interview, Arkham trilogy switch release

Aviva to acquire Optiom

On Monday (27 Nov), Aviva announced the acquisition of Optiom O2 Holdings Inc - a leading provider of vehicle replacement insurance in Canada - for total consideration of c.£100m (c.CAD$170m).

This should bolster Aviva's existing Canadian operations, and move them closer to their goal of being the top insurer in Canada. As a capital-light business, the acquisition also aligns with the growth strategy of the wider group.

Aviva to acquire Canadian vehicle replacement insurance business, Optiom
Supports Aviva’s capital-light growth in attractive Canadian market.

David Zaslav interview at DealBook Summit

David Zaslav made an appearance at the NYT DealBook Summit this week, and while it didn't make as much of a splash as Elon Musk saying "Go F*%k Yourselves" to advertisers, it was an interesting interview.

A particular takeaway for me was that the compensation package for the WBD executive team is being refocused on FCF generation and debt repayment. Here's an excerpt taken from the latest proxy statement that discusses this:

"The Committee is also very cognizant of the importance for the Company's long-term financial health to reduce its leverage. In furtherance of these objectives, on March 6, 2023, the Committee announced its decision to implement an incremental incentive compensation program designed to promote and reward achievement of the Company’s initiatives with regard to increasing free cash flow and reducing leverage."

It sounds like this is an additional compensation package rather than a replacement of the existing scheme.

The interviewer also brought up the topic of further acquisitions, but Zaslav was quick to say they've got plenty to focus on internally right now. I personally hope he sticks to this line, as I'd want to see a lot more deleveraging before any more M&A is considered.

Arkham trilogy released on Switch

Following on from the release of the Nintendo Switch version of Hogwarts Legacy, we now have a port of the Arkham trilogy. It looks like they've particularly struggled with this one, as evidenced by the delay from it's original November release, and the result is somewhat mixed. The 1st and 2nd games in the series (Arkham Asylum and Arkham City) seem to be quite playable, but the 3rd (Arkham Knight) has a few too many performance issues.

Porting these games was always going to be ambitious, but they've made a fair hash at it, and hopefully they'll get a return on their investment.

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Jamie Larson