NEW YORK — July 6, 2020 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2020 mergers and acquisitions trend report for the Financial Technology and Information Industry.
The report analyzes M&A activity during the first half of 2020 and compares it with the four previous six-month periods from 2018 to 2019. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.
Total volume decreased by ten percent on a half year basis. However, the number of private equity deals remained nearly constant during this timeframe. Aggregate value fell by 43 percent, from $68.93 billion to $39.05 billion. Of note, there were no deals that reached the $20 billion threshold in first half 2020, compared to two in second half 2019 and three in first half 2019. Regarding valuations, the median revenue multiple improved from 2.4x to 3.3x.
Deal activity in the Payment segment underwent a three percent increase in first half 2020. It was also the only segment that saw a rise in volume. High value transactions year-to-date included Wordline’s announced acquisition of Ingenico Group for $10.87 billion, which will form one of the largest payment services providers; and SoFi’s announced acquisition of Galileo Financial Technologies, a financial services API and payments platform, for $1.2 billion.
Meanwhile, Payments rivals Visa and Mastercard each completed acquisitions that reached the top ten list of largest deals during the half year period. 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.
Transaction volume in the Banking segment decreased 14 percent relative to second half 2019. Notable segment deals year-to-date included True Wind Capital’s announced acquisition of Open Lending, a provider of lending enablement and risk analytics solutions to financial institutions, for $1.3 billion; and First American Financial Corporation’s acquisition of DocuTech Corporation, which offers document technology solutions for mortgage, home equity, and consumer lending, for $350 million.
As for other selected sectors covered in the report, volume in the Capital Markets segment declined 16 percent relative to second half 2019. The Insurance segment fell 17 percent, which was the same as its first half 2019 level.
A copy of the FINANCIAL TECHNOLOGY AND INFORMATION INDUSTRY M&A REPORT FOR HALF YEAR 2020 is available at the Berkery Noyes website.