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M&A in Financial Technology Dips in 2013

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July 18, 2013

Berkery Noyes, an independent mid-market investment bank, says that M&A in the financial technology market sector this year is not keeping pace with the peaks of 2012. Its latest study looks at M&A in the past six months compared to previous half year 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 USD18.99 billion to USD10.95 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, driven by large sized acquisitions by SAP and Oracle.

 

Trends behind the M&A include taking advantage of big data, addressing holes in data security, adapting to new regulations, and mobile banking.

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