Investment banking services are provided by Harris Williams LLC and Solebury Capital LLC, registered broker-dealers and members of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 7078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. www.harriswilliams.com FINANCIAL TECHNOLOGY SECTOR REVIEW TECHNOLOGY, MEDIA & TELECOM GROUP │ Q1 2017
Transcript
Investment banking services are provided by Harris Williams LLC and Solebury Capital LLC, registered broker-dealers and members of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 7078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
www.harriswilliams.com
FINANCIAL TECHNOLOGY SECTOR REVIEWTECHNOLOGY, MEDIA & TELECOM GROUP │ Q1 2017
Blue Star is the leading provider of SaaS-based leaguemanagement software, online registration, and paymentprocessing solutions that manage the entire youth andamateur sports ecosystem.
Blue Star has increased its total payment processing volumethrough organic user growth, strategic acquisitions, and thedevelopment of strategic relationships with nationalgoverning bodies.
Majority growth investment from Genstar Capital positions theCompany for continued success as the largest and mostactive consolidator in the sports technology and paymentssector.
a portfolio company of
has received a
majority investment from
LEADING ADVISOR TO THE VERTICAL PAYMENTS SECTOR
For more information about the Vertical Payments sector and ourexperience, please contact HW&Co. at*[email protected].
To receive the latest Vertical Payments sector overview, please
Realpage’s acquisition of Lease Rent Options (The Rainmaker Group)
Rainmaker is a provider of revenue and profit optimization solutions to the multifamily and hospitality industries.
LRO provides revenue management solutions that facilitates optimized pricing for over 1.5 million apartments.
The acquisition will allow RealPage to capture emerging global demand for optimized operational andtransactional yields for rental housing assets, expand the Company’s real-time lease transaction data, andcross-sell existing products and services across its customer base.
Ent. Value: $300M
Revenue: $36M
EV / Revenue: 8.4x
EV / EBITDA: 30.0x
Announced: February 27, 2017
SELECT FINTECH M&A TRANSACTIONS – 1Q 20171
SUBSECTOR
BANKING
CORE SYSTEMS
PAYMENT
PROCESSING
PAYMENT
PROCESSING
REAL ESTATE &
LEASING
BANKING
CORE SYSTEMS
Warburg Pincus’ acquires a 35 percent shareholding in Avaloq
Avaloq is a provider of integrated modular banking software solutions for back, middle, and front officefunctionalities.
The Company serves more than 155 banks and wealth management firms and is focused on growth in its corewealth management and private banking business.
The investment will allow Avaloq to further capitalize on increasing demand for digital banking, outsourcing,SaaS software, and the global adoption of digital banking and wealth management solutions.
Ent. Value: $863M
Revenue: NA
EV / Revenue: NA
EV / EBITDA: NA
Announced: March 22, 2017
Vista Equity Partners’ acquisition of DH Corp. (merger with Misys)
DH Corp. is a provider of global payments and lending technology serving nearly 8,000 financial institutions,specialty lenders, community banks, credit unions, and governments.
Misys is a provider of financial software solutions focused on retail and corporate banking, lending, treasury,and capital markets, serving more than 2,000 customers in 130 countries.
The merger of DH Corp. and Misys will expand the Company’s global footprint and provide one of thebroadest and diversified sets of financial software to the institutional marketplace.
Announced: March 13, 2017
Ent. Value: $3,447M
Revenue: $1,268M
EV / Revenue: 2.7x
EV / EBITDA: 10.5x
Ministry Brands’ acquisition of YourMembership
YourMembership is a provider of SaaS-based, fully integrated software that enables member-centricorganizations to maximize revenue, increase relevance, and drive operational efficiencies.
The Company’s integrated payments platform offers real-time credit card processing solutions for associationsand non-profit organizations.
Ministry Brands’ acquisition, in combination with the acquisitions of Abila and Aptify, has led to the formation ofCommunity Brands, which will serve more than 13,000 associations and nonprofit organizations
Ent. Value: NA
Revenue: NA
EV / Revenue: NA
EV / EBITDA: NA
Announced: January 31, 2017
Bain Capital and Advent International’s acquisition of Concardis
Concardis is a provider of full-service payment processing solutions in Germany and Switzerland.
Concardis provides credit card systems and terminals for retailers, point of sale solutions, and paymentprocessing for e-commerce and mobile platforms.
The acquisition will enhance Concardis’ transaction volume growth and increase investment in innovation andinfrastructure to further establish the Company as a leader in payment services across Germany.Ent. Value: $746M
MOST ACTIVE STRATEGIC ACQUIRERS OF FINTECH ASSETS BY VOLUME2
GLOBAL FINANCIAL SOFTWARE M&A ACTIVITY2
The 10 most active strategic fintechconsolidators combined for over 145acquisitions since 2012.
During the first quarter of 2017,notable closed acquisitions includedThomson Reuters’ purchase of REDIGlobal Technologies and DepositoryTrust & Clearing Corp.
YTD 2017 this group has completed9 acquisitions which is on pace with2016 M&A activity.
Across financial software, therewere 112 M&A transactions closedin 1Q’17, with buyout and growthequity control transactionsrepresenting 40% of total dealvolume.
Interest in financial software amongstrategic acquirers remains strong,with traditional vendors and bigbanks targeting fintech assets toreduce the rising threat ofdisintermediation, while enabling anevolving mix of technology-orientedsolution offerings, and facilitatingregulatory compliance.
Announced Date Target/Issuer Buyer Description New Money ($m)
03/16/2017 Recurly Greycroft Partners Provider of enterprise subscription billing management software. NA
03/14/2017 ProducePay Menlo Ventures Provider of a financing platform connecting farmers, distributors, and banks. $77
03/08/2017 Veem Kleiner Perkins Provider of discounted international wire transfer serv ices. $24
03/06/2017 CurrencyCloud GoogleVentures Provider of a foreign exchange payments platform to remit cross border payments. $25
03/02/2017 Sensibill Impression Ventures Provider of a receipt management platform. $17
02/14/2017 Exactuals TTV Capital Provider of a SaaS payments platform focused on the royalty/residual based markets. $11
01/12/2017 HouseCanary Bryant Stibel Provider of a real estate analytics platform. $33
01/11/2017 iZettle American Express Ventures, Intel Capital Provider of credit card serv ices allowing users to accept payments on mobile devices. $63
01/11/2017 PayClip General Atlantic Provider of card reader serv ices enabling users to accept mobile credit card payments. $24
01/11/2017 Fino Paytech Blackstone, ICICI Provider of a banking technology platform for payment serv ices. $59
01/09/2017 Activehours Felicis Ventures Provider of software enabling employees to access earned wages at their discretion. $22
01/06/2017 Regent Education Chrysalis Ventures, Ares Capital Provider of financial aid management serv ices for private education institutions. $11
01/05/2017 PayNearMe UnionGrove Provider of a cash-based payments platform. $21
12/20/2016 Appetize Shamrock Capital Advisors Provider of a multi-site and multi-business unit point-of-sale (POS) solution for retailers. $20
12/07/2016 Nubank DST Global, Founders Fund Provider of digital credit cards and online financial serv ices. $80
Announced Date Target/Issuer Buyer Description Enterprise Value ($m)
03/29/2017 NuData Security, Inc. Mastercard, Inc. Provider of real-time behavioral and statistical analytics software to verify users. NA
03/16/2017 Acculynk, Inc. First Data Corp. Provider of white label payment and authentication solutions. NA
02/28/2017 Retail Merchant Serv ices Ltd. TCMI, Inc. Provider of low-cost card payment serv ices. NA
02/27/2017 Rainmaker Group (Lease Rent Options) RealPage, Inc. Provider of profit optimization software for the mutifamily housing sector. $300
02/14/2017 TIO Networks Corp. PayPal Holdings, Inc. Provider of cloud-based multi-channel bill payment processing serv ices. $170
02/08/2017 Sigma Payment Solutions, Inc. M&A Ventures LLC Provider of automated credit card processing and merchant serv ices. NA
02/06/2017 Clarient Thomson Reuters Provider of a client reference data platform. NA
01/31/2017 YourMembership.com Ministry Brands Provider of membership management software and payment solutions for associations. NA
01/26/2017 MoneyGram International, Inc. Ant Financial Provider of payment processing solutions facilitating global money transfer serv ices. $1,656
01/18/2017 PAI Merchant Serv ices, Inc. Clearent LLC Provider of payment processing solutions tailored to the specific needs of merchants. NA
01/13/2017 Concardis Bain Capital, Advent International Provider of full-serv ice payment serv ices, credit card systems, and POS solutions. $746
01/10/2017 Financial-Information-Technologies, LLC Luminate Capital Partners Provider of data, payment, and software serv ices to the beverage alcohol industry. NA
01/05/2017 Financial Management Solutions Kronos Provider of workforce and analytics applications. NA
01/04/2017 Sterling Payment Technologies LLC EVO Payments International LLC Provider of electronic transaction processing serv ices for all major credit cards. $195
12/15/2016 Tallie K1 Investment Management Provider of a comprehensive, cloud-based expense report software for CPAs. NA
11/17/2016 PeerStreet Andreessen Horowitz; Montage Ventures Provider of online asset-backed-security brokerage serv ices to consumers. $15
11/01/2016 Classy JMI Equity, Salesforce Ventures Provider of online fundraising platform for social good organizations. $30
Announced Date Target/Issuer Buyer Description Enterprise Value ($m)
03/29/2017 GiveForward, Inc. YouCaring Provider of an online fundraising platform. NA
03/27/2017 Fit Pay NXT-ID Provider of a contactless payments platform for wearables and IoT devices. NA
03/01/2017 OrderAhead Square Provider of a mobile application for on-demand delivery of food. NA
02/22/2017 Tilt.com, Inc. Airbnb, Inc. Provider of a social crowdfunding platform. $62
02/01/2017 ZenBanx Holding Ltd. Social Finance, Inc. Provider of an international, multi-currency mobile banking platform. $100
01/30/2017 UniRush LLC Green Dot Corp. Provider of prepaid debit card solutions. $151
12/13/2016 AFJC Corp. Credit Karma, Inc. Provider of online indiv idual tax filing serv ices. NA
11/20/2016 LifeLock, Inc. Symantec Corp. Provider of theft identity protection serv ices. $2,096
11/18/2016 Cookies Labs GmbH Klarna AB Provider of a mobile application for peer-to-peer payments. NA
11/16/2016 Iron Horse Holdings LLC LendingTree LLC Provider of online credit card comparison, education, monitoring, and management. $130
10/18/2016 KountMoney Lendingkart Provider of data analytics to the P2P personal loan industry. NA
10/13/2016 RoboVest, Inc. InvestView, Inc. Provider of online trading and brokerage applications. NA
10/06/2016 Paribus Co. Capital One Financial Corp. Provides online consumer banking serv ices. NA
10/03/2016 Boltmade, Inc. Shopify, Inc. Provider of consumer centric software for the retail industry. NA
09/13/2016 EyeVerify, Inc. Ant Financial Serv ices Group Provider of mobile eye verification technology. $100
CONSUMER SOLUTIONS – TRANSACTION ACTIVITY
SELECT RECENT M&A TRANSACTIONS1
SELECT RECENT PRIVATE PLACEMENT TRANSACTIONS2
* “NM” indicates transaction value below $1 million.
PAGE | 18
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q1 2017
SUMMARY OF TECHNOLOGY IPOS3
The technology IPO window appears tohave opened up in 2017. IPO dollar volumeincreased significantly in the first quarter,with five transactions representing nearly $4billion of total equity issued in thequarter. While much of this dollar volumewas driven by Snap’s $3.4 billion IPO, it is stillencouraging for the technology IPO marketgiven the limited volume of new issuancesover the last 12 months.
For the five technology IPOs in 1Q-2017,shares are trading up by a median 14%above their IPO price, creating a favorableoutlook for additional technology listings inthe near term.
MARKET CAP AT IPO (LTM) REVENUE GROWTH (1YR PRIOR TO IPO)OFFERING SIZE AT IPO (LTM)
RECENT U.S. IPO ACTIVITY (BY OFFERING SIZE)
26%
47%
26%
< 25% 25 - 75% > 75%
45%
25%
30%
$0-50M $50-500M $500M-$1B $1B+
5%
30%
45%
20%
$0 - 50M $50 - 100M $100 - 250M $250M +
(All tech IPOs over the last 12 months) (All tech IPOs over the last 12 months) (All tech IPOs over the last 12 months)
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