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Full Year 2020 Finance Industry Trends
2020 Key Highlights
The most active acquirer in the Capital Markets segment during the year was Cboe Global Markets with five transactions: BIDS Trading, the operator of the BIDS Alternative Trading System (ATS); Trade Alert, a real-time alerts and order flow analysis company; MatchNow, broker-neutral dark pool that facilitates liquidity for buyers and sellers seeking anonymity for their transactions; Hanweck Associates, which offers real-time risk analytics on global derivatives markets; and FT Options, a portfolio management platform provider.
Six of the top ten largest deals in 2020 occurred in the Banking segment. These six transactions, with a combined value of $36.22 billion, accounted for 40 percent of the industry’s total value.
2020 Key Trends
Total transaction volume in 2020 declined by 12 percent over 2019, from 562 to 497. On a half year basis, M&A activity remained about constant in 2nd Half 2020 over 1st Half 2020, from 250 to 247.
Total transaction value in 2020 fell by 50 percent over 2019, from $180.06 billion to $90.20 billion. However, this was still 84 percent higher than its 2018 level. On a half year basis, M&A value increased 22 percent in 2nd Half 2020 over 1st Half 2020, from $40.63 billion to $49.57 billion.
The median revenue multiple moved upward from 2.9x in 2019 to 3.1x in 2019.
The segment with the largest rise in volume in 2020 over 2019 was Insurance, which improved 12 percent, from 67 to 75 deals.
M&A Market Overview
Berkery Noyes tracked 1,572 Financial Technology and Information transactions between 2018 and 2020, of which 337 disclosed financial terms, and calculated the aggregate value to be $295.62 billion. Based on known transaction values, we project values of 1,235 undisclosed transactions to be $23.14 billion, totaling $318.77 billion worth of transactions tracked over the past three years.
Disclosed median enterprise value multiples for all segments combined in this report during the last 36 months were 3.0x revenue and 14.1x EBITDA.