NEW YORK — January 13, 2016 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2015 mergers and acquisitions trend report for the Financial Technology and Information Industry.

The report analyzes M&A activity for the sector during 2015 and compares it with data covering 2013 and 2014. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.

Transaction volume rose 14 percent on a year-to-year basis. Aggregate value more than doubled, from $27.81 billion to $63.78 billion. FIS’ acquisition of financial software company SunGard Data Systems for $9.1 billion was the industry’s largest deal since 2012, when Intercontinental Exchange acquired NYSE Euronext for $10.18 billion. In terms of valuations, the median revenue multiple experienced an uptick from 3.0x to 3.2x, while the median EBITDA multiple declined from 13.3x to 10.5x.

The Payments segment, after rising 46 percent in 2014, saw volume decrease 21 percent in 2015. In terms of value, five of the industry’s top ten largest deals during the year occurred in the segment. The highest value Payments transaction in 2015 was Global Payments’ announced acquisition of Heartland Payment Systems, which offers payment processing services to merchants, as well as those in several vertical markets such as the education sector, for $4.31 billion. Notable mobile-based deals included Snapdeal’s acquisition of Freecharge, a mobile commerce platform that gives users coupons for adding money to prepaid mobile plans and paying bills online, for $379 million; and PayPal’s acquisition of Paydiant, a cloud-based payment processor, for $280 million.

Transaction volume in the Capital Markets segment increased 42 percent over the past year, making it the sector with the largest yearly gain. Intercontinental Exchange was responsible for two of the segment’s top ten highest value deals during the year with the acquisition of Interactive Data Corporation, a provider of financial market data and analytics, for $7.45 billion; and Trayport, which offers energy trading solutions to traders, brokers and exchanges, for $646 million. Other notable Capital Markets deals in 2015 included SS&C Technologies’ acquisition of Advent Software, a provider of portfolio management and accounting systems software, for $2.55 billion; Bridgepoint’s acquisition of eFront SA, which offers software solutions focused on alternative investments and risk management, for $327 million; and Temenos Group’s acquisition of Multifonds, a fund administration software company, for $260 million.

“Significantly, the median revenue and EBITDA multiples in the Capital Markets sector during 2015 have trended well above those of the entire financial technology industry,” said Peter Ognibene, Managing Director at Berkery Noyes. “While it took this sector the longest to recover from the financial crisis, buyers are piling in now and really driving up prices. We’re also seeing an increased number of software providers who have a recurring revenue business model. Whether developed initially or through transition, these companies are well positioned to take advantage of the financial industry’s willingness to accept cloud solutions in contrast to years of insisting on behind the firewall deployments.”

Ognibene continued, “Among several areas, acquirers are interested in solutions that provide alpha and streamline middle and back-office functions. Meanwhile, resources are being dedicated to identify gaps in existing infrastructure architectures, consolidate multiple reporting systems, and better assess existing client data. There has also been an impetus to manage cyber vulnerabilities, which is an area that is ripe for substantial technology investment.”

As for other markets covered in the report, acquisition activity in the Banking segment increased 35 percent, from 62 to 85 deals. The largest Banking transaction in 2015 was Diebold’s announced acquisition of Wincor Nixdorf, a provider of IT solutions and services to banks and the retail sector, for $1.8 billion. Diebold, which focuses on automated teller machines and financial software, has a strong presence in the Americas, whereas Wincor Nixdorf is well established in Europe. Regarding the Insurance segment, volume increased 22 percent, from 51 to 62 transactions. The largest Insurance related deal in 2015 was Vista Equity Partners’ acquisition of Solera Holdings in the property and casualty (P&C) sector for $6.25 billion.

“New database technologies are improving the ability of debt servicers to assemble disparate pieces of information about consumers, making it easier and more cost-efficient to locate and contact them,” said John Guzzo, Managing Director at Berkery Noyes. “Mortgage servicers are also experiencing greater demand for more targeted and frequent borrower communication, including email, text messaging and more complex print and mail offerings.” Guzzo continued, “Innovations have aided lenders and debt servicers in the ability to obtain, store and transfer data about consumers and their debts. When licensing technology or subscribing to third-party technology is not an option, outsourcing business processes has become a viable solution and growing trend as well.”

A copy of the FINANCIAL TECHNOLOGY AND INFORMATION INDUSTRY M&A REPORT FOR FULL YEAR 2015 is available at the Berkery Noyes website.