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

The report analyzes M&A activity during the first half of 2016 and compares it with the four previous six-month periods from 2014 to 2015. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.

Total transaction volume increased 13 percent in on a half year basis. Aggregate deal value declined 14 percent, from $43.75 billion to $37.49 billion. However, when compared to first half 2015, value almost doubled. The peak for volume throughout the last 30 months occurred in first half 2016 whereas value reached its zenith in second half 2015.

The median revenue multiple over the past six months decreased from 2.0x to 1.7x. Of note, deals during the last two-and-a-half years with enterprise values above $160 million received a median revenue multiple of 4.7x and median EBITDA multiple of 16.2x, whereas those in the $10-$20 million range had a median revenue multiple of 2.4x and median EBITDA multiple of 11.8x, respectively.

Deal activity in the Capital Markets segment saw a four percent uptick in first half 2016. Regarding value, three of the overall industry’s top five largest deals year-to-date occurred in the Capital Markets segment. These three transactions, with a combined value of $26.75 billion, accounted for 71 percent of the industry’s aggregate value thus far in 2016. The industry’s largest transaction in first half 2016 was Deutsche Börse Group’s announced merger with London Stock Exchange Group for $14.68 billion in an all-stock deal. Despite the United Kingdom’s recent decision to withdraw from the European Union, the mega-merger has remained on track. According to Bloomberg, this would be the world’s biggest exchange operator by revenue and second-largest by market value.

Notable Capital Markets transactions aside from the top three deals included Ally’s acquisition of TradeKing, an online brokerage and digital wealth management company, for $275 million; Asset International’s acquisition of Market Metrics, a market research firm focused on advisor-sold investments and insurance products, for $165 million; and FTV Capital’s growth equity investment in True Potential, an investor and wealth management technology platform serving advisers and retail clients, which valued True Potential in excess of £150 million.

“Risk management and tracking tools delivered real-time dovetail precisely with an environment ever more focused on analytics, regulatory constraints and pressures and investor driven transparency,” said Peter Ognibene, Managing Director at Berkery Noyes. “In addition, any type of technology or service that can help take out costs, drive alpha, or provide trading ideas is very attractive to acquirers.” Ognibene continued, “From a buyer’s perspective, one of the most important things is the size of the addressable market, since financial services breaks itself down into very discrete niches, the growth rate that the company is experiencing, and the barriers to entry. At the end of the day, all strategic acquirers are seeking growth.”

Deal volume in the Payments segment experienced a 34 percent rise relative to second half 2015. As a result, Payments was nearly tied with Capital Markets as the industry’s most active sector year-to-date. In terms of value, four of the overall industry’s top ten largest deals in first half 2016 were Payments related. The highest value Payments deal year-to-date was TSYS’ acquisition of TransFirst, a provider of secure transaction processing services and payment enabling technologies, which was acquired from Vista Equity Partners for $2.33 billion.

The segment with the largest increase in volume during first half 2016 was Insurance with a 47 percent gain. Insurance also surpassed the Banking segment as the industry’s third most active sector. The largest Insurance related deal in first half 2016 was CSC’s acquisition of Xchanging, which provides technology-enabled business solutions to the global commercial insurance industry, for $767 million.

Meanwhile, the number of transactions in the Banking segment decreased ten percent, which marked a return to its second half 2015 level. The largest Banking deal in first half 2016 was GTCR’s acquisition of Optimal Blue, a cloud-based technology provider that offers enterprise lending services to mortgage originators and investors, for $350 million. This was also the only private equity backed deal in the overall industry’s top ten list of largest transactions year-to-date.

“As the real estate market heats up, an increase in digital advertising budgets will likely follow,” stated John Guzzo, Managing Director at Berkery Noyes. “There has been a heightened emphasis in several areas, for instance marketing automation, real-time bidding and programmatic technology. All of this represents a shift in digital ad spend.” Guzzo continued, “Moreover, there is innovation occurring in many areas, as seen by the plethora of businesses that provide predictive marketing analytics, CRM solutions, virtual property viewing services, broker-free search engines, and technology-enabled property and lease management brokerages. Companies with these types of offerings are receiving interest from potential acquirers.”

A copy of the FINANCIAL TECHNOLOGY AND INFORMATION INDUSTRY M&A REPORT FOR HALF YEAR 2016 is available at the Berkery Noyes website.