November 3, 2014 FINANCIAL TECHNOLOGY DEAL VALUE LIFTED BY THE PAYMENTS SECTOR

Berkery Noyes has issued its third quarter 2014 Financial Technology report. 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.

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.”