1st Half 2020 Finance Industry Trends

1ST HALF 2020 KEY HIGHLIGHTS

The highest value deal in 1st Half 2020 was Morgan Stanley’s announced acquisition of E-Trade, an online brokerage company, for $13.13 billion.

Payments rivals Visa and Mastercard each completed acquisitions that reached the top ten list of largest deals in 1st Half 2020. Visa announced its acquisition of Plaid Technologies, which develops and creates API’s for banking data, for $5.3 billion; and Mastercard announced its acquisition of Finicity, a provider of real-time access to financial data and insights, for $825 million.

Nine of the top ten largest transactions year-to-date were completed by strategic acquirers.

1ST HALF 2020 KEY TRENDS

Total transaction volume in 1st Half 2020 decreased by ten percent over 2nd Half 2019, from 274 to 246. However, private equity volume remained nearly constant during this timeframe.

Total transaction value in 1st Half 2020 fell by 43 percent over 2nd Half 2019, from $68.93 billion to $39.05 billion. Of note, there were no deals that reached the $20 billion threshold in 1st Half 2020, compared to two in 2nd Half 2019 and three in 1st Half 2019.

The median revenue multiple improved from 2.4x in 2nd Half 2019 to 3.3x in 1st Half 2020.

M&A MARKET OVERVIEW

Berkery Noyes tracked 1,320 Financial Technology and Information transactions between 2018 and 1st Half 2020, of which 276 disclosed financial terms, and calculated the aggregate transaction value to be $249.01 billion. Based on known transaction values, we project values of 1,044 undisclosed transactions to be $18.73 billion, totaling $267.74 billion worth of transactions tracked over the past two and a half years.

Transactions from 1st Half 2018 to 1st Half 2020 with enterprise values above $160 million received a median revenue multiple of 4.8x, whereas those in the $20-$160 million range garnered a median revenue multiple of 2.9x and those in the $10-$20 million range had a median revenue multiple of 1.7x.