First half to second half, 2009 M&A activity in the Financial Technology and Information segment (“Fintech”) exhibited several signs of stabilization. Activity as measured by aggregate volume showed a modest 2% increase from 1st Half 2009 to 2nd Half 2009 while median enterprise value/revenue multiples increased by 6%. According to John Guzzo, Managing Director for Fintech, the stabilization of multiples in the 2nd Half “…signifies increased confidence in the future growth of targets and the sector.” Peter Ognibene, also Managing Director for Fintech, expects that “as financial market institutions begin to recover and increase vendor spend, content and IT firms servicing the space begin to show improved results which leads to a more robust M&A environment.”
For the full year 2009, Fintech M&A activity continued its downward trend. Aggregate transaction volume decreased by 28% from 243 deals in 2008 to 174 in 2009, while aggregate transaction value decreased by 59% from $25.29 billion in 2008 to $10.30 billion in 2009.
The largest transaction in the Financial Technology and Information segment in 2009 was Fidelity National Information Services’ acquisition of Metavante Technologies for $2.9 billion, which closed on October 1st. The most active buyer as measured by aggregate volume of transactions was The Carlyle Group with four transactions.
Berkery Noyes expects that the new landscape of financial services will create unique opportunities for certain sub-segments to grow. One sub-segment in particular that should respond well to the changing environment is “the credit risk and valuation analytics sector which will continue to show positive trends as capital market investors seek further transparency of the underlying assets in their portfolio,” according to John Guzzo.