Solganick & Co. issues latest Financial Technology (FinTech) M&A Update for Q3 2016

October 19, 2016 – Solganick & Co. has issued its latest Financial Technology (FinTech) M&A Update for Q3 2016.

Despite the global decline of deals number, U.S. appears robust and contributed the majority M&A fintech deals. U.S. accounts for $8.07 B out of the global $8.09 B deals size, considering cross-border transactions.

  • Markit Group acquired by IHS for $5.9 B and is the largest fintech deal announced in Q3 2016.
  • Financial Technology M&A environment is not as active as last quarter in the U.S. with only 19 transactions with valuation of $24.68 billion. But quantitatively the same as last Q2, indicating the entire market is getting more mature and higher valuations are occurring.
  • Other notable M&A transactions announced this quarter includes CBOE Holdings acquisition of BATS Global Markets for $3.2 B and Vocallink acquisition by MasterCard for $920 M.
  • The median revenue multiple for fintech companies on a year-over-year basis declined from 3.2x to 2.2x.
  • The median EBITDA multiple on a year-over-year basis decreased from 15.2x to 12.1x.

 

Global M&A, Q3 2016

Global M&A activity during the third quarter of 2016 was cut by half compared to second quarter activity. After 2016’s surge of M&A activity, Deals are reserved for the last quarter 2016. Global M&A deal value in Q3 reached $8.09 B, only one-third of Q2 data, meaning smaller deal sizes on average in Q3.

Political issues and a trade war between Europe and U.S. threatened investors who in turn chose to take conservative stand and seeked a secure investment vertical.

As the approach of Britain’s official exit to EU, Euro stay fluctuated in Q3 while GBP plunged again in Q3 following the drop in Q2. This was a major reason why deal value for Q3 2016 in the EU fell 50.5% compared to that of Q2 2016. The expected uptick in EU deal volume are either postponed or sink to the bottom .

China is recovering from the Q2 dip and announced 3 fintech deals in Q3 2016.

 

To download the complete report, go here: solganick-co-fintech-mna-update-q3-2016-final

 

Solganick & Co. covers the financial technology (fintech) industry sector and provides mergers and acquisitions advisory and investment banking services to leading companies and institutions. For more information please contact us.

Posted in FinTech, Quarterly Update, Sector Analysis and tagged , .