NEW YORK — October 16, 2014 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2014 mergers and acquisitions trend report for the Financial Technology and Information Industry.

The report analyzes M&A activity for the sector during the first three quarters of 2014 and compares it with data covering 2013. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.

Transaction volume remained nearly constant over the past three months. However, aggregate deal value almost doubled, from $5.3 billion to $10.0 billion. This was also the peak for value throughout the past year-and-a-half on a quarterly basis. In terms of valuations, the median revenue multiple from 2013 through the first three quarters of 2014 increased from 2.3x to 3.2x, while the median EBITDA multiple rose from 12.0x to 16.2x.

Seven of the report’s top ten largest deals year-to-date occurred in the Payments segment. Three of these transactions occurred in third quarter 2014, two of which reached the $1 billion threshold. This consisted of FleetCor’s acquisition Comdata Corporation for $3.5 billion and Ingenico Group’s acquisition of GlobalCollect for $1.1 billion. Other deals in the segment by high profile acquirers during the quarter included FIS’ acquisition of Clear2Pay for $493 million and Heartland Payment System’s acquisition of TouchNet Information Systems for $360 million.

Regarding volume, the number of deals in the Payments segment underwent a 23 percent quarter-to-quarter increase. Apple, which is making a major move in the payments space with the iPhone 6, could serve as a catalyst by prompting merchants in the U.S. to adopt the Europay, MasterCard, and Visa (EMV) standards in advance of the October 2015 deadline. One notable transaction involving EMV standards in third quarter 2014 was ACI Worldwide’s $113 million acquisition of Retail Decisions (ReD), an e-commerce and fraud prevention company that serves the payments market. With Apple Pay, near field communication (NFC) might also begin to gain more widespread traction with consumers, following Google Wallet and other technologies that have been met with somewhat limited success.

“Card providers and merchants are seeking to gain a competitive edge and reduce fraud related costs by acquiring the best technology available,” said John Guzzo, Managing Director at Berkery Noyes. “As EMV capable systems reduce in-person fraud, fraudsters will shift online, thus requiring merchants to adopt even more advanced technology.” Guzzo continued, “We also expect strategic acquirers to enhance their product suites by acquiring leading-edge mobile payments, wallet, and commerce companies.”

As for other areas covered in the report, transaction activity in the Capital Markets segment stayed about the same. This followed a 61 percent rise from first to second quarter 2014. One of the largest Capital Markets deals in third quarter 2014 was Intercontinental Exchange’s acquisition of SuperDerivatives, a provider of risk management analytics and financial market data, for $350 million.

“The governance, risk, and compliance (GRC) marketplace as a whole is very active at the moment,” said Peter Ognibene, Managing Director at Berkery Noyes. “Many acquirers are showing a strong interest in GRC vendors that help create consistent processes for risk assessment. The focus now is on integrating technology and content across business functions, rather than relying on ad-hoc or fragmented corporate compliance systems.”

A copy of the FINANCIAL TECHNOLOGY AND INFORMATION INDUSTRY M&A REPORT FOR THIRD QUARTER 2014 is available at the Berkery Noyes website.