NEW YORK, Jan. 21, 2014 /PRNewswire/ -- Berkery Noyes, an independent mid-market investment bank, today released its full year 2013 mergers and acquisitions trend report for the Financial Technology and Information Industry.
The report analyzes M&A activity for the sector during 2013 and compares it with data covering 2011 and 2012. This market includes information and technology companies in Capital Markets, Payments, Banking, Insurance, and other related financial services.
Transaction volume experienced a ten percent increase over the past year, with a total of 341 deals in 2013. This was the peak for volume during the three years covered in the report when examined on an annual basis. Aggregate deal value decreased from $32.49 billion to $30.03 billion, an eight percent decline. The median revenue multiple fell from 2.9x to 2.2x, while the median EBITDA multiple remained nearly constant at 11.7x.
Financial sponsors accounted for 18 percent of transaction volume in 2013, which was about the same as in 2012. However, private equity deal value rose from 19 percent to 40 percent of the industry's overall value. This included five of the top ten largest deals in 2013.
The Payments segment saw deal volume stay consistent on a year-to-year basis. This followed a 45 percent increase between 2011 and 2012. Regarding the mobile payments subset, the largest transaction in 2013 was FIS' acquisition of mFoundry for $115 million.
"Credit unions and banks, realizing the advantage of a recurring payment system, are utilizing automatic e-bills and online banking services to generate sustained revenue from their payments business," said John Guzzo, Managing Director at Berkery Noyes. "Consumers who regularly use e-billing services tend to have higher satisfaction rates and more prompt repayment schedules. This is important as financial institutions deal with heightened competition from third party payment providers." Guzzo continued, "Each of these factors bodes well for M&A in the electronic bill payment & presentment (EBPP) sector."
The number of transactions in the Capital Markets segment increased 19 percent compared to 2012. TA Associates-backed Ion Trading's acquisition of Triple Point Technology for $900 million was the largest Capital Markets deal during 2013. "Advances in automation are leading trading venues, institutional brokers, technology vendors and information providers to converge on this market and offer integrated, end-to-end solutions," stated Peter Ognibene, Managing Director at Berkery Noyes.
"Likewise, governmental and exchange level regulations are changing constantly and growing in complexity, increasing risk to financial services participants and sharpening their appetite for tools to manage risk."
Meanwhile, M&A activity in the Banking segment rose ten percent relative to 2012. Six of the industry's top ten largest deals were also in the Banking segment. In addition to this, there were several transactions completed by notable acquirers that were focused on fraud and security solutions. This included Experian's acquisition of The 41st Parameter, a provider of fraud detection services, for $310 million; and IBM's acquisition of Trusteer, an endpoint security software company that protects financial institutions against fraud and data breaches.
As for the Insurance segment, deal volume increased 16 percent from 2012 to 2013. The two highest value transactions in the segment were completed by private equity firms. This consisted of Hellman & Friedman's acquisition of Applied Systems for $1.8 billion and Kohlberg Kravis Roberts & Co.'s (KKR's) acquisition of Mitchell International for $1 billion. Applied Systems was acquired from Bain Capital, while Mitchell International was acquired from Aurora Capital Group.
A copy of the FINANCIAL TECHNOLOGY AND INFORMATION INDUSTRY M&A REPORT FOR FULL 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.
SOURCE Berkery Noyes