Q3 2020 Key Highlights
Two of the top three highest value deals in Q3 2020 involved SaaS-based companies that serve the mortgage sector: Intercontinental Exchange’s announced acquisition of Ellie Mae for $11 billion; and Black Knight’s announced acquisition of Optimal Blue for $1.8 billion, which it plans to merge with its Compass Analytics business in a newly formed entity.
Also of note regarding these two deals, Thoma Bravo acquired Ellie Mae in 2019 for $3.3 billion and GTCR acquired Optimal Blue in 2016 for $350 million.
Q3 2020 Key Trends
Total transaction volume in Q3 2020 remained about constant over Q2 2020, from 117 to 119.
Total transaction value in Q3 2020 more than quadrupled over Q2 2020, from $5.6 billion to $24 billion.
Both the Insurance and Payments segments experienced notable increases in volume on a quarterly basis. Insurance volume improved 73 percent, from 11 to 19 deals. Payments volume gained 17 percent, from 41 to 48 deals.
Multiples & Value Trends
The median revenue multiple from 2019 through the 1st 3 Quarters of 2020 shifted slightly, from 2.9x to 3.0x.
Top Ten Deals Through Q3 2020
The top ten deals by value have seen four new additions since our half year report, all of which were completed by strategic acquirers. In addition, nine of the top ten largest deals year-to-date were completed by strategics.
These four transactions, with an aggregate value of $19.5 billion, represented 31 percent of transaction value in the 1st 3 Quarters of 2020 and 81 percent of Q3 2020 transaction value.