NEW YORK — January 8, 2020 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2019 mergers and acquisitions trend report for the Financial Technology and Information Industry.
The report analyzes M&A activity for the sector during 2019 and compares it with data covering 2017 and 2018. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.
Transaction volume increased ten percent on a year-to-year basis. Aggregate value more than tripled, from $49.32 billion to $180.86 billion. Of note, there were five deals with disclosed values above $20 billion in 2019, compared to none in 2018. In terms of valuations, the median revenue multiple shifted slightly from 3.0x to 2.9x. Over the past three years, deals in the $10-$20 million range received a median enterprise value multiple of 1.1x revenue, compared to 2.4x revenue for those in the $20-$80 million range and 4.4x revenue for those in the $80 million and above range.
M&A volume in the Payments segment increased 18 percent over the past year. Four of the overall industry’s top ten highest value transactions during 2019 occurred in the Payments segment. Along these lines were:
- FIS’s merger with Worldpay Group for $42.87 billion (this was the highest value transaction ever recorded in the industry by Berkery Noyes);
- Global Payments’ announced acquisition of TSYS, which offers credit card processing and other services, for $26.06 billion;
- Fiserv’s acquisition of First Data Corporation, a payment processing company, for $22 billion; and
- Mastercard’s announced acquisition of the corporate services business from Nets Holding A/S, which facilitates the exchange of digital payments for banks, businesses, merchants, and consumers, for $3.19 billion.
Deal activity in the Capital Markets segment gained nine percent from 2018 to 2019. Three of the industry’s top ten highest value deals during the year were Capital Markets related. This consisted of Thomson Reuters and Blackstone’s sale of Refinitiv, a financial data analytics provider, to the London Stock Exchange for $27 billion; Charles Schwab’s announced acquisition of TD Ameritrade, a broker that offers an electronic trading platform, for $26 billion; and BlackRock’s acquisition of eFront, an alternative investment management software and solutions provider, for $1.3 billion.
Other high profile Capital Markets transactions included Deutsche Börse Group’s announced acquisition of Axioma, a risk management and portfolio construction company used by financial institutions, for $850 million; Ant Financial’s announced acquisition of WorldFirst, a foreign exchange company, for $700 million; and Envestnet’s acquisition of PIEtech, the creator of the MoneyGuide family of financial planning applications, for $500 million.
As for other select markets covered in the report, acquisition activity in the Banking segment increased five percent on an annual basis. Notable segment transactions in 2019 included Thoma Bravo’s acquisition of Ellie Mae, a cloud-based platform provider that serves the residential mortgage sector, for $3.3 billion; Temenos Group’s acquisition of Kony, a provider of digital banking software, for $559 million; and Q2 Software’s acquisition of PrecisionLender, which offers a sales, negotiation, and coaching platform for bankers, for $510 million.
A copy of the FINANCIAL TECHNOLOGY AND INFORMATION INDUSTRY M&A REPORT FOR FULL YEAR 2019 is available at the Berkery Noyes website.