NEW YORK — October 12, 2017 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2017 mergers and acquisitions trend report for the Financial Technology and Information Industry.

The report analyzes M&A activity for the sector during the first three quarters of 2017 and compares it with data covering 2016. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.

Transaction volume year-to-date decreased five percent compared to the corresponding timeframe in 2016. Aggregate deal value rose 19 percent, from $30.7 billion to $36.6 billion. In terms of year-over-year valuations, the median revenue multiple increased from 1.8x to 2.6x while the median EBITDA multiple improved from 11.4x to 14.9x.

M&A activity in the Capital Markets segment declined 19 percent on a quarterly basis, from 31 to 25 acquisitions. Relative to the same time period in 2016, the segment year-to-date experienced a five percent decrease in volume.

Notable Capital Markets transactions in third quarter 2017 included Genstar Capital’s announced acquisition of Institutional Shareholder Services, which offers corporate governance and responsible investment solutions to financial market participants, for $720 million; Nasdaq’s announced acquisition of eVestment Alliance, a content and analytics provider used by asset managers, investment consultants and asset owners to help facilitate institutional investment decisions, for $705 million; and Envestnet’s announced acquisition of FolioDynamix, an integrated wealth management technology solutions company, for $195 million. According to Peter Ognibene, Managing Director at Berkery Noyes, “Any type of technology or service that can help take out costs or drive alpha or provide trading ideas is very attractive to acquirers.”

The number of deals in the Payments segment underwent a 15 percent quarter-to-quarter decrease, from 26 to 22 acquisitions. The overall industry’s largest transaction in third quarter 2017 and year-to-date was U.S. based Vantiv’s announced merger with U.K. based Worldpay Group for $11.6 billion, which will result in the creation of a global payment provider with comprehensive products and capabilities.

Additional notable Payments transactions during the quarter included Blackhawk Network’s acquisition of Cash Star, which offers gift card commerce solutions, for $175 million; Verisk Analytics’ announced acquisition of G2 Web Services, a provider of merchant risk management services, for $112 million; Stripe’s acquisition of Payable, which helps companies automate onboarding, payments, and 1099 tax reporting and compliance; and Fiserv’s acquisition of Dovetail Systems, a provider of bank payments and liquidity management solutions.

“The payments sector is likely to stay at the forefront of M&A activity as companies invest in emerging security technology,” said John Guzzo, Managing Director at Berkery Noyes. “As companies continue to pursue electronic bill payment and online payments to reduce paper bills, the industry may see more M&A in that space in the future as well.” Guzzo continued, “It’s also a seller’s market for young and small companies that have cornered any technology related to mobile wallets or near field communication.”

As for other industry sectors, there was a 27 percent quarterly volume increase in the Insurance segment, from 15 to 19 deals. Notable segment transactions during the past three months included Verisk Analytics’ announced acquisition of Sequel Business Solutions, an insurance and reinsurance software specialist, for $321 million; Core Logic’s acquisition of Myriad Development, which specializes in business process management products and services for insurance carriers, real estate companies, and government agencies; and The Carlyle Group’s announced acquisition of Prima Solutions, a software vendor that designs, develops and markets software exclusively for insurance providers.

Meanwhile, there was a 39 percent quarterly decline in the Banking segment, from 31 to 19 transactions. This followed an 24 percent increase in Q2 2017, which was the segment’s peak over the previous seven quarters covered in the report. M&A activity rose 15 percent on a year-over-year basis. The Banking segment’s largest deal in third quarter 2017 was Red Venture’s announced acquisition of Bankrate, an online publisher, aggregator, and distributor of personal finance content, for $1.4 billion. Other notable segment transactions during the quarter included Mastercard’s announced acquisition of Brighterion, a software company that specializes in AI solutions that are used for fraud prevention, onboarding and risk monitoring, behavioral device ID, and data breach detection; and Fiserv’s acquisition of PCLender, which offers internet-based mortgage software and mortgage lending technology solutions.

A copy of the FINANCIAL TECHNOLOGY AND INFORMATION INDUSTRY M&A REPORT FOR THIRD QUARTER 2017 is available at the Berkery Noyes website.