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Full Year 2008 Finance Industry Trends
2008 Key Highlights
- The largest transaction for 2008 was the CME Group’s acquisition of the New York Mercantile Exchange for $9.03 billion.
- The most active buyer in the Financial Technology & Information industry by way of volume of announced transactions for 2008 with 5 transactions was Morningstar, Inc. (Tenfore Systems, Ltd., 10K Wizard Technology, LLC, InvestData Pty Ltd, Fundamental Data Limited and Financial Computer Support).
- The segment with the largest transaction volume for 2008 was Trading Workflow with 61 transactions.
2008 Key Trends
- Total transaction volume in 2008 decreased by only 1 percent over 2007 from 121 in 2007 to 120 in 2008.
- Total transaction value in 2008 decreased by 70 percent over 2007, from $57.16 billion in 2007 to $17.15 billion in 2008.
- The segment with the largest increase in volume in 2008 over 2007 was Trading Workflow with a 22 percent increase from 50 transactions in 2007 to 61 transactions in 2008.
M&A Market Overview
Despite a brutal market sell-off, the failure of more than a few financial institutions and the onset of a sharp recession, M&A activity in the Financial Technology and Information industry held steady throughout the 4th qtr and 2008 as a whole; at least in terms of the number of transactions closed. As anticipated, we saw a steep drop throughout the year, but especially in the 4th quarter, of the large, levered transactions which came to typify much of the M&A landscape the previous few years. We have already begun to see transactions where the Buyer is strategic and the size and scope of the deal are decidedly "tactical" in nature and would expect continued acceleration of that. As risk aversion continues among Buyers, these types of deals will tend to proliferate as they carry a lower risk factor than larger deals. We expect M&A activity to be most active among such niches as Risk/Compliance, Data/Content and Services.