NEW YORK, July 17, 2013 /PRNewswire/ --Berkery Noyes, an independent mid-market investment bank, today released its half year 2013 mergers and acquisitions trend report for the Financial Technology and Information Industry.
The report analyzes M&A activity during the first half of 2013 and compares it with the four previous six-month periods. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.
Deal volume underwent an eight percent decrease in first half 2013. Transaction value fell 42 percent over the past six months, from $18.99 billion to $10.95 billion. Both volume and value throughout the past two-and-a-half years reached their respective peaks in second half 2012. When compared to first half 2012, volume increased seven percent and value dropped 11 percent in first half 2013. The median revenue multiple between second half 2012 and first half 2013 decreased from 3.0x to 2.1x, while the median EBITDA multiple declined from 11.0x to 9.8x.
The segment with the largest half-to-half year increase in volume was Insurance, which rose 42 percent in first half 2013. SAP made a move in the segment with its acquisition of Camilion, a software company that provides product development and management solutions to insurance organizations. Oracle, one of SAP's main rivals, acquired insurance software companies Skywire and AdminServer back in 2008. Another notable Insurance segment deal in first half 2013 was CoreLogic's $78 million acquisition of CDS Business Mapping, which supplies digital mapping solutions to the property and casualty insurance sector through its RiskMeter Online platform.
The Capital Markets segment experienced a slight uptick in volume on a half year basis, from 49 to 54 transactions. The largest Capital Markets deal in first half 2013 was NASDAQ's acquisition of eSpeed for $750 million. Meanwhile, M&A activity in the Payments segment declined 37 percent during first half 2013. This followed a 36 percent increase between first and second half 2012, which was the segment's highest point over the past two-and-a-half years. Upon further examination, volume in the Payments segment in first half 2013 was close to its historical average as recorded over the past 30 months. Notable payments transactions year-to-date included TSYS' acquisition of Netspend for $1.27 billion, ACI Worldwide's acquisition of Online Resources Corporation for $238 million, and FIS' acquisition of mFoundry for $120 million.
"Whether it is taking advantage of big data, addressing holes in data security, or adapting to new regulations, payments companies are seeking a technological advantage over their competitors," said Peter Ognibene, Managing Director at Berkery Noyes. "Mobile banking is also taking hold in the marketplace, which is fostering a broad spectrum of M&A opportunities."
The industry's highest value transaction in first half 2013, Fidelity National Financial's announced acquisition of Lender Processing Services for $3.83 billion, occurred in the Banking segment. "There is strong demand for electronic record keeping solutions that facilitate compliance," said John Guzzo, Managing Director at Berkery Noyes. "Scalable technologies capable of supporting electronic document delivery and record keeping are vital for lenders, servicers, and sub-servicers as they adapt to a quickly changing landscape."
Guzzo continued, "In addition, banks and credit unions are using social media to solicit new customers, interact with current account holders, and disseminate information to a broad audience. Certain firms are using monitoring software and other tools to avoid potential compliance issues, which can easily occur when consumer complaints are initiated via social media. Given all of these factors, the strong interest in technology that assists the banking sector with mitigating risk and strengthening compliance is likely to continue."
A copy of the FINANCIAL TECHNOLOGY AND INFORMATION INDUSTRY M&A REPORT FOR HALF YEAR 2013 is available at the Berkery Noyes website.
About Berkery Noyes
Berkery Noyes is an independent investment banking advisory firm servicing the information industry. The firm specializes in mergers and acquisitions advisory, debt and equity financing, and financial consulting services for companies in the $10 million to $500 million range. Since its founding by Joseph W. Berkery in 1983, Berkery Noyes has worked with corporate clients to grow through acquisition, divest non-core assets, and maximize shareholder returns through strategic transactions and restructurings. For private owners, Berkery Noyes helps create liquidity and execute timely exit strategies that achieve their personal and professional objectives. The firm's research teams publish acquisition activity in the respective sectors they follow on MandAsoft.com.
Securities services are offered through Berkery Noyes Securities, LLC. For more information, visit www.berkerynoyes.com.
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