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

The report analyzes M&A activity during the first half of 2015 and compares it with the four previous six-month periods from 2013 to 2014. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.

Total transaction volume decreased seven percent in first half 2015. Aggregate deal value increased 17 percent, from $16.21 billion to $18.90 billion. When compared to first half 2014, volume rose 14 percent and value gained 63 percent. The peak for volume throughout the last 30 months occurred in second half 2014 while value reached its zenith in first half 2015.

The median revenue multiple increased from 2.8x in second half 2014 to 4.5x in first half 2015. Of note, deals during the last two-and-a-half years with enterprise values above $160 million received a median revenue multiple of 4.5x and median EBITDA multiple of 16.2x, whereas those in the $10-$20 million range had a median revenue multiple of 1.7x and median EBITDA multiple of 9.0x.

The segment with the largest increase in volume during first half 2015 was Capital Markets with a 31 percent rise, from 58 to 76 deals. Four of the top ten deals also occurred in the Capital Markets segment. Notable related transactions included SS&C Technologies’ acquisition of Advent Software, a provider of portfolio management software, for $2.6 billion; Playtech’s acquisition of Plus500, an online FOREX trading platform that serves retail customers, for $697 million; BATS Global Markets’ acquisition of KCG Hotspot FX, a FOREX trading venue and electronic communication network, for $365 million; and Bridgepoint’s acquisition eFront SA, which offers software solutions focused on alternative investments and risk management, for $327 million.

“An increased appetite for technology spending at financial institutions is presenting vendors with good pipelines and an increased array of legacy tech sellers,” stated Peter Ognibene, Managing Director at Berkery Noyes. “In addition, regulatory pressures are requiring more transparency pertaining to risk assessment and valuation methods.”

Meanwhile, the number of transactions in the Banking segment remained about constant on a half year basis. Notable Banking deals in first half 2015 included Bottomline Technologies’ acquisition of Intellinx, a provider of cyber fraud and risk management solutions, for $67 million; and Temenos Group’s acquisition of Akcelerant Holdings, which offers origination, account servicing, collection, and risk management software, for $50 million. As for the Insurance segment, transaction volume rose 15 percent, from 26 to 30 deals.

The overall industry’s decrease in volume over the past six months was attributable in major part to a 41 percent decline in the Payments segment. This came in the aftermath of a 46 percent increase in second half 2014, which was the segment’s highest point over the past two-and-a-half years. In terms of value, six of the industry’s top ten largest deals year-to-date were Payments related. Three of these six transactions reached the $1 billion threshold. This consisted of a private equity consortium’s acquisition of ICBPI, an Italian payments and clearing services company, for $2.5 billion; Optimal Payments’ acquisition of Skrill Group, a digital payments business, for $1.7 billion; and Davis + Henderson’s acquisition of FundTech, a payments and transaction banking software company, for $1.3 billion.

“The payments sector had many license-and-maintenance legacy business models, which are good, but not always the most attractive to buyers,” said John Guzzo, Managing Director at Berkery Noyes. “Today, companies prefer subscription based business models. Moreover, as companies continue to pursue electronic bill payment and online payments to eliminate paper bills, the payments industry may see more mergers in that space in the future.” Guzzo continued, “Data analytics represent another attractive and growing field in payments for buyers as they seek to harness vital customer and transaction data and repackage it for marketing and sales purposes. Payments companies want to offer more intelligence to their customers.”

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