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
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