Our April Report on M&A in the FinTech, Data and Analytics Industry
Fear, Light, and M&A in the COVID-19 World
01 Our April Report on M&A in the FinTech, Data and Analytics Industry
Fear, Light, and M&A in the COVID-19 World
Dear Clients and Friends, Our latest report on values and M&A trends in the eleven segments of the FinTech, Data and Analytics world that we follow is here. It’s been a heck of a month. We are up to around one million cases of COVID-19 worldwide – including 200,000 in the US. More than 50,000 people have died globally – including 13,000 in Italy, 9,000 in Spain, and 4,000 in the US. In some places, COVID-19 is doubling every three to seven days. It is already overwhelming some medical systems and the forecast is for US deaths to reach 200,000 or more. That may be less than the 650,000 in the US who die each year from heart disease, but it is a lot more than the 23,000 expected to die in the US from seasonal flu this year. As you will see in the report here, valuations for companies in our world are not immune from this crisis. As businesses are shuttered and workers furloughed, some buyers and investors have reassessed risk. Values are now about 20% below January – not as much as much as you might expect – possibly for good reason The experts tell us that this crisis is likely to be over in months. With that in mind, many financial sponsors and corporations, flush with cash, remain on the hunt for opportunities. While compromised companies should hold off going to market, several of our stronger clients remain in discussions with potential partners. This week our client, Barcelona-based Strands Labs, SA, agreed to be acquired CRIF S.p.A, one of Italy’s largest credit bureaus and a leading open banking company. We don’t have the answers. We know that fear has pushed many governments to shut down much of their economies – hoping that the damage caused by shuttered businesses, soaring unemployment and increased national debt – and personal debt – will not be worse than the disease we seek to cure. When this crisis does end, history has shown that pent up demand will spur economic activity; most (not all) businesses will recover, and employment will rise. There is light at the end of this tunnel. Our aim is to help our clients be ready, when it shines. Our latest M&A report can be found here. A few of the more interesting transactions over the past month include: . CRIF S.p.A. acquired M&A client Strands Labs (Digital banking) . Bakkt Holding raised $300 million in a Series B funding round from . Alignment Healthcare raised $135 million in a Series C funding Intercontinental Exchange and other investors (Bitcoin futures trading round from Fidelity Investments, T. Rowe Price, and Durable Capital platform) Partners (Insur Tech) . Ada Support raised $44 million in a Series B funding round led by . Dentsu Aegis Network agreed to acquire Merkle for $98 million Accel (Chatbot Solution) (Data Analytics) . Nets agreed to acquire PeP for €405 million (Payments Tech) Sincerely,
Ken Marlin | Founder & Managing Member | Marlin & Associates 570 Lexington Ave | 48th Floor | New York, NY 10022 | marlinllc.com P.S. My book, “The Marine Corps Way To Win on Wall Street” does a pretty good job of showing what we do that is different than most firms – and why.
Marlin & Associates Securities LLC, a wholly owned subsidiary of Marlin & Associates Holding LLC, is a broker-dealer registered with the Securities and Exchange Commission and a FINRA/SIPC member firm (www.finra.org.) 02 Our April Report on M&A in the FinTech, Data and Analytics Industry
Contents
Mergers and Acquisitions Transaction Activity 4
Bank Tech 5
Capital Markets Tech 6
Data & Analytics – Financial Services 7
Digital Tech 8
Information Services 9
InsurTech 10
Mortgage Tech 11
Payments Tech 12
Regulatory Tech 13
Securities Exchange 14
Wealth Tech 15
Sectors’ Relative Multiples 16
Sectors’ Relative Operating Metrics 17
Clients Choose Us To Advise Them On Their Most Important Strategic Decisions 18 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Mergers and Acquisitions Transaction Activity
Software and Services Transaction Activity (1) Software and Services Transaction Multiples (1)
$35.0 800 60.0x 55.6x $30.3 700 $30.0 $28.6 50.0x
$25.7 600 $25.0 40.8x $22.0 40.0x 36.7x 500 35.5x $19.2 $20.0 $18.5 30.0x $16.8 400 30.0x 27.0x $15.0 24.4x 300 $10.9 20.0x $10.0 15.0x 200
10.0x $5.0 6.0x 100 5.4x 4.6x 3.4x 3.9x 3.4x 2.6x 2.3x
$0.0 - 0.0x Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20
Total Transaction Value No. Transactions EV/EBITDA EV/Revenue
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/20. Note: Mid-market M&A defined as transactions with enterprise values below $1 billion. 04 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Bank Tech
. Acquirer(s) / Recurring (subscription based) businesses and those that provide mission-critical Target / Issuer Description services should get a leg up against transaction-based platforms. Investor(s) B2B should withstand the downturn better than B2C models. 3/30/20: CRIF S.p.A. (Bologna, Italy) agreed to acquire Strands Labs (Barcelona, Spain) for an undisclosed sum. Strands . Bundling value added services should accelerate and can help realize higher LTVs. develops innovative FinTech software that enables banks to Emphasis will be on diversifying end verticals, product sets, service offer personalized digital banking experience to their customers. offerings, and technology stack. Cost efficiencies and management should become key as should focus on 3/24/20: Arkose Labs (San Francisco) raised $22 million in a profitability and self-sustainability. Series B funding round led by M12 (San Francisco, CA). Arkose Labs develops a platform that detects and mitigates online fraud.
. See our recent deal announcement for the sale of Strands to CRIF. Separately, some 3/18/20: boro (Lansing, MI) raised $12 million in a Series A notable capital raises were the $22 million Series B by Arkose Labs and the $12 funding round led by LexinFintech (Shenzhen, China). boro is a million Series A by boro. provider of affordable loans and financial education to students that have largely been ignored by traditional lenders.
5 Year LTM Revenue & EBITDA Multiples
12.0x 33x
10.5x 29x 9.0x (USD millions) Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin 25x 7.5x Company Cap Value CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E 21x
6.0x EV / EBITDA EV EV / Revenue FIS $ 74,969 $ 94,620 9.2 x 7.0x 27.8x 16.1x 23% 30% 33% 44% 4.5x 17x Fiserv 64,508 88,135 8.7 x 5.5x 24.9x 15.1x 75% 57% 35% 36% 3.0x 13x Jack Henry & Associates 11,910 11,908 7.7 x 6.8x 28.0x 21.1x 6% 13% 27% 32% Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Temenos 9,449 10,472 10.8 x 9.3x 38.8x 22.6x 16% 16% 28% 41% EV / LTM Revenue EV / LTM EBITDA Q2 Holdings 2,860 3,197 10.1 x 7.8x (97.1x) 182.3x 31% 30% (10%) 4% ACI Worldwide 2,805 4,136 3.3 x 2.8x 20.5x 9.6x 25% 19% 16% 29% Oracle Financial Services 2,318 1,768 2.5 x 2.6x 5.7x 5.6x 3% (7%) 43% 47% 5 Year M&A Bank Tech Index vs. S&P 500, base = 100 NCR Corporation 2,287 6,230 0.9 x 1.0x 8.0x 6.8x 8% (9%) 11% 15% 280 Bottomline Technologies 1,613 1,651 3.9 x 3.5x 43.6x 15.6x 7% 11% 9% 23% Virtusa 848 1,169 0.9 x 0.9x 12.0x 7.9x 22% 8% 8% 11% 250 Aptitude Software Group 246 207 2.6 x 2.6x 13.5x 13.3x 19% 1% 19% 20% 220 Trim Mean $ 10,955 $ 14,296 5.4 x 4.4 x 19.9 x 14.2 x 17.2% 13.4% 20.7% 27.8% 190 Median $ 2,805 $ 4,136 3.9 x 3.5 x 20.5 x 15.1 x 18.6% 12.6% 19.4% 28.9% 160 130 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Banking Software Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 05 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Capital Markets Tech
. Acquirer(s) / Investors are increasingly backing financial services companies in emerging / smaller Target / Issuer Description markets as they look to capitalize on the attractive demographics, limited competition, Investor(s) strong macro-economic growth (including supportive infrastructure) and growing 3/25/20: SS&C (Windsor, CT) agreed to acquire Captricity demand for more innovative financial products. (Oakland, CA) for an undisclosed sum. Captricity provides cloud- This leads to the obvious: the Fintech vertical is complex and thus the based SaaS solution that converts information from paper to need for specialist sector familiarity. We help with that. Not only is in- digital data effectively. depth, practical experience required of the Fintech ecosystem, but also knowledge of the regulatory environment and opportunities / threats that 3/12/20: Santander (Madrid, Spain) agreed to acquire Mercury have hindered the established firms over the years. (Madrid, Spain). Mercury provides trade finance software solutions to banks. Its web-based portal helps automate end-to- end trade finance transactions and management operations. 3/2/20: TickSmith (Montréal, Canada) raised C$2 million (~$1.5 million) in a Seed funding round led by BDC Capital (Montréal, Canada). TickSmith creates applications that allow capital markets and financial institutions to interpret value and gain insights from financial data.
5 Year LTM Revenue & EBITDA Multiples
15.0x 58x 54x 13.5x 50x 46x 42x 12.0x 38x 34x (USD millions) Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin 10.5x 30x 26x EV / EBITDA Company Cap Value CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E EV / Revenue 22x 9.0x 18x 14x IHS Markit $ 23,935 $ 29,413 6.7 x 6.8x 19.0x 15.8x 10% (2%) 35% 43% 7.5x 10x SS&C Technologies 11,204 18,613 4.0 x 3.9x 11.0x 9.8x 35% 2% 36% 40% Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Broadridge 10,887 12,754 2.9 x 2.8x 14.0x 12.2x 1% 6% 21% 23% EV / LTM Revenue EV / LTM EBITDA SimCorp 3,343 3,387 6.6 x 6.5x 22.8x 22.7x 16% 2% 29% 29% Computershare 3,222 4,742 2.0 x 2.1x 7.7x 7.3x 2% (2%) 26% 28% Envestnet 2,845 3,429 3.8 x 3.4x 39.9x 16.1x 11% 11% 10% 21% 5 Year M&A Capital Markets Tech Index vs. S&P 500, base = 100 IRESS 1,109 1,263 3.5 x 3.7x 15.7x 14.8x 9% (5%) 23% 25% 280 First Derivatives 776 879 3.0 x 2.8x 24.7x 14.6x 13% 9% 12% 19% Linedata Services 131 231 1.2 x 1.3x 5.7x 4.6x (4%) (4%) 21% 27% 250 220 Trim Mean $ 4,769 $ 6,438 3.7 x 3.6 x 16.4 x 13.0 x 8.9% 1.8% 24.0% 27.5% Median $ 3,222 $ 3,429 3.5 x 3.4 x 15.7 x 14.6 x 10.1% 2.2% 22.6% 27.0% 190 160 130 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Capital Markets Tech Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 06 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Data & Analytics – Financial Services
. Acquirer(s) / Data and analytics are a large part of what holds the current company construct Target / Issuer Description together – we think. Now, in the current market – that may be an understatement. Investor(s) They drive enhanced productivity and accelerate efficiency in all sectors. Their ability 3/25/20: Dentsu Aegis Network (London, UK) agreed to acquire to evaluate, forecast, test and adjust in digital environments provides companies Merkle (Columbia, MD) for $98 million. Merkle uses data, across all industries with huge advantages. technology, and analytics to help the brands make their advertising addressable. . There is increased pressure on global supply chains and logistics to improve speed, efficiency and agility through better analysis. Is Amazon the poster child here? These 3/11/20: Baker Tilly Virchow Krause (Chicago, IL) agreed to industries are investing aggressively in their data and analytic capabilities and acquire Talavant (Madison, WI) for an undisclosed sum. include human capital, procurement, sales, billing and corporate finance. Talavant, Inc. offers data analytics-based management consulting services.
. Data and analytic companies are more valuable than ever before – even in the 3/3/20: Mellanox (Sunnyvale, CA) agreed to acquire Titan IC current market disruptions. Strong, hard to see dynamics, recurring revenue models (Belfast, Northern Ireland). Titan IC is a developer of network and long-term contracts have underpinned high valuations, as well as significant intelligence and security technology to accelerate search and big investment and M&A activity, from strategic and VC/PE investors alike. data analytics across a range of applications in data centers.
5 Year LTM Revenue & EBITDA Multiples
12.0x 33x
10.5x 29x (USD millions) EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin Market Enterprise 9.0x Cap Value 25x Company CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E 7.5x 21x
6.0x EV / EBITDA
S&P Global Inc. $ 58,982 $ 63,093 9.4 x 9.0x 18.8x 17.4x 7% 4% 50% 52% EV / Revenue Moody's Corporation 39,594 44,044 9.1 x 8.8x 19.4x 18.3x 9% 4% 47% 48% 4.5x 17x Experian plc 25,231 29,501 6.1 x 5.5x 19.6x 15.8x 6% 9% 31% 35% 3.0x 13x MSCI Inc. 24,566 26,318 16.9 x 15.4x 32.1x 27.9x 9% 9% 53% 55% Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 IHS Markit Ltd. 23,935 29,413 6.7 x 6.8x 19.0x 15.8x 10% (2%) 35% 43% EV / LTM Revenue EV / LTM EBITDA Verisk Analytics, Inc. 22,730 25,941 10.0 x 9.2x 24.6x 19.6x 9% 8% 40% 47% CoStar Group, Inc. 21,518 20,597 14.7 x 12.4x 46.3x 39.9x 17% 18% 32% 31% Equifax Inc. 14,569 17,696 5.0 x 4.8x 21.9x 14.1x 3% 5% 23% 34% 5 Year M&A Data Analytics - Financial Services Index vs. S&P 500, base = TransUnion 12,560 16,127 6.1 x 5.7x 16.6x 14.3x 15% 7% 37% 40% FactSet Research Systems Inc. 9,881 10,373 7.2 x 6.8x 20.8x 20.0x 6% 6% 35% 34% 280 Fair Isaac Corporation 8,969 9,881 8.5 x 7.9x 34.9x 23.6x 16% 8% 24% 33% 250 Morningstar, Inc. 4,982 5,302 4.5 x n.a. 21.5x n.a. 16% (100%) 21% n.a. 220 CoreLogic, Inc. 2,413 4,125 2.3 x 2.4x 11.2x 8.0x (1%) (3%) 21% 30% 190 Trim Mean $ 18,958 $ 21,381 7.9 x 7.7 x 22.7 x 18.7 x 9.5% 5.0% 34.1% 39.8% 160 Median $ 21,518 $ 20,597 7.2 x 7.4 x 20.8 x 17.9 x 8.7% 5.6% 34.7% 37.5% 130 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Data Analytics Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 07 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Digital Tech
. Acquirer(s) / Enterprise software continues to be strong across the board with significant activity in Target / Issuer Description some of the emerging technologies such as automation, analytics and AI as well as Investor(s) digital transformation; We think such businesses will see a stronger tailwind coming 3/25/20: Espressive (Santa Clara, CA) raised $30 million in a out of this crisis. Series B funding round led by Insight Venture Partners (New York, NY). Espressive uses artificial intelligence to automate . Notable acquisitions included DocuSign’s acquisition of Seal Software primarily for its help desks for employee inquiries. AI capabilities; Facebook’s acquisition of Scape Technologies – a UK company using 3/22/20: Zendesk (San Francisco, CA) agreed to acquire computer vision to offer more accurate location positioning as well as acquisition of Smooch (Montreal, Canada) for an undisclosed sum. Smooch is Deeptide – company behind free and open resource for machine learning; an omnichannel conversation platform which enables businesses ServiceNow’s acquisition of Passage AI – a conversational AI platform company. to integrate their communication channel to other applications like WhatsApp, FB Messenger, Twitter, Line, etc. 3/01/20: Ada Support (Toronto, Canada) raised $44 million in a Series B funding round led by Accel (Palo Alto, CA). Ada Support develops a chatbot solution called Ada for enterprise clients. The chatbot enables enterprises to automate their customer support.
5 Year LTM Revenue & EBITDA Multiples
73x (USD millions) EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin 16.5x 69x Market Enterprise 65x 15.0x Company Cap Value CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E 61x 57x 13.5x 53x ServiceNow $ 54,393 $ 53,833 15.6 x 12.2x 183.0x 42.8x 33% 28% 9% 28% 12.0x 49x 45x Slack 14,945 14,418 36.0 x 16.8x (106.3x) (148.4x) 82% 114% (34%) -11% 41x
10.5x EV / EBITDA Zendesk 7,256 7,361 9.0 x 7.0x (60.6x) 83.3x 36% 28% (15%) 8% EV / Revenue 37x 9.0x 33x Alteryx 6,225 6,172 14.8 x 11.1x 133.1x 72.0x 65% 33% 11% 15% 29x Pegasystems 5,674 5,674 6.2 x 5.2x (50.0x) 103.3x 2% 20% (12%) 5% 7.5x 25x Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 HubSpot 5,766 5,412 8.0 x 6.5x (184.9x) 61.0x 32% 23% (4%) 11% Nuance Communications 4,747 6,031 3.3 x 4.1x 16.0x 16.5x (1%) (19%) 21% 25% EV / LTM Revenue EV / LTM EBITDA New Relic 2,740 2,496 5.2 x 3.7x (267.3x) 31.6x 35% 39% (2%) 12% Medallia 2,683 2,348 7.5 x 5.0x (37.6x) 116.8x 20% 51% (20%) 4% LivePerson 1,461 1,483 5.1 x 4.3x (24.4x) (1,004.1x) 17% 19% (21%) 0% 5 Year M&A Digital Tech Index vs. S&P 500, base = 100 Blue Prism Group 1,166 1,073 8.2 x 5.3x (10.4x) (15.5x) 85% 54% (79%) -35% 400 Cardlytics 934 829 3.9 x 3.2x (64.8x) 65.0x 40% 22% (6%) 5% 370 340 IMImobile 312 339 1.8 x 1.6x 17.3x 12.4x 19% 16% 11% 13% 310 LiveChat Software 262 253 8.9 x 7.7x 13.6x 11.8x 9% 15% 65% 65% 280 eGain 225 188 2.8 x 2.5x 29.8x 69.8x 10% 12% 9% 4% 250 220 Artificial Solutions 25 47 7.2 x 7.1x (3.3x) (4.6x) 3% 2% (220%) -154% 190 Trim Mean $ 3,885 $ 3,863 7.6 x 6.1 x -23.8 x 28.6 x 28.6% 25.8% -9.5% 6.0% 160 130 Median $ 2,712 $ 2,422 7.4 x 5.3 x -17.4 x 37.2 x 25.8% 22.4% -5.2% 6.7% 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Banking Software Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 08 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Information Services
. Acquirer(s) / The challenges and opportunities of information services are too many to count these Target / Issuer Description days. Enterprises (large or small) that are going through digital transformation Investor(s) exercises may be looking for a way to accelerate that change. 3/18/20: Fiserv (Brookfield, WI) agreed to acquire Bypass Mobile (Austin, TX) for an undisclosed sum. Bypass Mobile provides a . Traditional IT and business services companies are entrenching technology into their cloud-based point of sales software that tracks sales and offerings to grow productivity, cut costs and sustain continued profit margins. This has inventory and provides reporting features. been the path forward for years – but seems to have accelerated lately. Did they sit 3/12/20: MobieTrain NV (Antwerp, Flemish Region) raised €1.8 back and wait for learn best practices - to evolve into tech-enabled services players million in a Series A funding round co-led by Concentra NV and potentially even repositioning as SaaS companies? This would be the step (Limburg, Belgium) and Limburgse Reconversie Maatschappij function – to gain significant value creation through multiple expansion. (Limburg, Belgium). MobieTrain NV develops a mobile learning platform for retail and finance sector. The company provides employee engagement trainings and courses with personalized and gamified learning management system. 3/10/20: 3Pillar Global (Fairfax, VA) raised an undisclosed sum in a Series B funding round led by CIP Capital (New York, NY). 3Pillar Global is a software development company specializing in adaptive software products and applications.
5 Year LTM Revenue & EBITDA Multiples
11.5x 38x 34x 10.0x 30x 8.5x 26x (USD millions) Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin 7.0x 22x Cap Value Company CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E 5.5x EV / EBITDA EV EV / Revenue 18x 4.0x RELX Group $ 41,517 $ 49,367 4.7 x 5.0x 15.5x 13.8x 9% (4%) 30% 36% 14x Thomson Reuters 33,485 35,672 6.0 x 5.8x 32.6x 18.4x 7% 4% 19% 32% 2.5x 10x Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Wolters Kluwer 18,753 21,189 4.1 x 4.0x 14.5x 13.6x 6% 3% 28% 29% Gartner 8,872 11,748 2.8 x 2.7x 20.6x 17.6x 7% 4% 13% 15% EV / LTM Revenue EV / LTM EBITDA Informa 6,897 10,446 2.7 x 3.3x 8.4x 10.8x 27% (18%) 32% 31% Nielsen 4,469 13,020 2.0 x 2.0x 10.8x 7.0x (0%) 2% 19% 28% Pearson 5,154 6,724 1.3 x 1.4x 9.8x 8.7x (3%) (9%) 13% 17% 5 Year M&A Information Services Index vs. S&P 500, base = 50 Euromoney 1,085 1,025 3.3 x 2.2x 14.1x 9.1x (1%) 50% 23% 24% 200 Forrester Research 548 690 1.5 x 1.5x 20.3x 13.0x 29% 3% 7% 11% 170 comScore 198 423 1.1 x 1.1x (19.0x) 12.4x (7%) 2% (6%) 9% 140 Trim Mean $ 9,908 $ 12,564 2.8 x 2.7 x 14.2 x 12.4 x 6.5% 0.5% 19.2% 23.3% Median $ 6,026 $ 11,097 2.7 x 2.4 x 14.3 x 12.7 x 6.5% 2.4% 18.6% 26.1% 110
80
50 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Information Services Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 09 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
InsurTech
. Acquirer(s) / Investments in InsurTech reached a new high in 2019 with global funding Target / Issuer Description commitments of over $6 billion across 250 transactions; Several new unicorns were Investor(s) minted leading to 10 InsurTech unicorns globally. 3/10/20: INSTANDA (London, UK) raised $19.5 million in a Series A funding round led by Assembly Capital Partners . Most of the large activity has been around digital distribution platforms but (London, UK). Instanda provides SaaS insurance software that increasingly companies tackling assessing & pricing of risk and automating claims allows clients to design and build a product through the full policy processing are highly sought after. lifecycle. 3/6/20: Pager (New York, NY) raised $33 million in both equity and debt financing round led by Health Catalyst Capital (New . M&A activity in the space continues to rise with both strategics as well as financial York, NY). Pager is a mobile healthcare technology company investors being aggressive bidders – over 100+ transactions completed last year with that developed a mobile app which connects healthcare North America accounting for ~75% of all M&A deals. providers and patients with different types of urgent care health services. 3/4/20: Alignment Healthcare (Orange, CA) raised $135 million in a Series C funding round co-led by Fidelity Investments (Boston, MA), T. Rowe Price (Baltimore, MD), and Durable Capital Partners (Washington D.C.) Alignment Healthcare provides a model for health care delivery that cuts costs by unraveling the inefficiencies of the current system. 5 Year LTM Revenue & EBITDA Multiples 50x 12.0x 46x 42x 10.5x 38x 9.0x 34x 30x 7.5x (USD millions) Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin 26x
6.0x 22x EV / EBITDA Company Cap Value CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E EV / Revenue 18x 4.5x 14x AON $ 38,421 $ 46,246 4.2 x 4.0x 14.5x 12.6x 2% 5% 29% 32% 3.0x 10x Cerner 19,649 20,297 3.6 x 3.5x 17.7x 11.0x 6% 3% 20% 31% Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Guidewire Software 6,574 5,945 8.3 x 8.1x 147.1x 63.1x 10% 2% 6% 13% EV / LTM Revenue EV / LTM EBITDA HealthEquity 3,594 4,704 16.4 x 6.0x 49.1x 18.8x 25% 172% 33% 32% CorVel 987 998 1.7 x n.a. 11.8x n.a. 7% (100%) 14% n.a. Sapiens 952 983 3.0 x 2.6x 17.2x 15.4x 12% 15% 18% 17% 5 Year M&A Data Analytics - Insur Tech Index vs. S&P 500, base = 100 EverQuote 703 657 2.6 x 2.1x (108.8x) 46.8x 52% 28% (2%) 4% Ebix 463 1,198 2.1 x 1.8x 7.8x 6.3x 17% 14% 26% 29% 280 Majesco 236 195 1.4 x n.a. 13.6x n.a. 14% (100%) 10% n.a. 250 Trim Mean $ 4,703 $ 4,969 3.6 x 3.6 x 18.8 x 20.9 x 13.0% -4.7% 17.6% 24.4% 220 Median $ 987 $ 1,198 3.0 x 3.5 x 14.5 x 15.4 x 12.4% 5.0% 17.5% 28.9% 190 160 130 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Insur Tech Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 10 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Mortgage Tech
. Acquirer(s) / Origination volumes, which were largely driven by the significant increase in Target / Issuer Description refinancings, have been severely affected due to the shut-downs, as well as by Investor(s) employment and wage uncertainty. 3/20/20: Pupil (London, UK) raised €14.9 million in a Series A funding round led by City Developments Limited (Singapore). . Mortgage servicers expect a wave of missed payments from borrowers as early as Pupil is a real estate AI measurement startup that seeks to next month, which would force them to come up with tens of billions of dollars on disrupt the $280-trillion global real estate industry. short notice. 3/3/20: Eden (New York, NY) agreed to acquire Managed by Q Industry participants are lobbying for a facility that would ensure millions of (New York, NY) for an undisclosed sum. Managed by Q is the Americans could obtain “forbearance” agreements allowing them to miss platform for workplace management, connecting office some mortgage payments and make them up at a later date. operations teams to dedicated workplace experts and top Fannie Mae and Freddie Mac announced that they would suspend for at commercial service providers. least 60 days foreclosures and evictions of homeowners who fall behind 3/3/20: Intercoastal Mortgage Company (Fairfax, VA) agreed to on their mortgage payments. acquire Potomac Mortgage Group (Fairfax, VA) for an undisclosed sum. Potomac Mortgage Group, Inc., doing . Investors capital will increasingly focus on and emphasize profitability over growth, business as MVB Mortgage, a private mortgage banking firm, strong platforms will continue to attract capital. provides home mortgage services to clients in the United States.
5 Year LTM Revenue & EBITDA Multiples
14.5x 37x 13.0x 33x 11.5x (USD millions) Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin 29x 10.0x 25x Cap Value Company CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E 8.5x 21x 7.0x 17x EV / EBITDA
FIS $ 74,969 $ 94,620 9.2 x 7.0x 27.8x 16.1x 23% 30% 33% 44% EV / Revenue 5.5x 13x Fiserv 64,508 88,135 8.7 x 5.5x 24.9x 15.1x 75% 57% 35% 36% 4.0x 9x Fair Isaac 8,969 9,881 8.5 x 7.9x 34.9x 23.6x 16% 8% 24% 33% 2.5x 5x Black Knight 8,593 10,169 8.6 x 8.5x 25.6x 16.9x 6% 2% 34% 50% Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Zillow Group 7,405 7,496 2.7 x 2.0x (42.5x) (157.6x) 106% 35% (6%) -1% EV / LTM Revenue EV / LTM EBITDA Fidelity National Financial 6,857 7,472 0.9 x 0.9x 4.5x 5.5x 12% (1%) 19% 16% REA Group 6,221 6,369 9.6 x 11.9x 19.4x 20.0x 3% (19%) 50% 60% First American 4,771 4,619 0.7 x 0.7x 4.3x 4.7x 8% 2% 17% 15% 5 Year M&A Digital Tech Index vs. S&P 500, base = 100 Radian Group 2,572 3,561 2.3 x 2.5x 3.6x n.a. 20% (5%) 64% n.a. CoreLogic 2,413 4,125 2.3 x 2.4x 11.2x 8.0x (1%) (3%) 21% 30% 280 Real Matters 834 772 2.4 x 1.8x 28.4x 14.5x 15% 30% 8% 13% 250 Stewart Information Services 632 572 0.3 x 0.3x 3.4x 4.7x 2% (1%) 9% 6% 220 Altisource Portfolio Solutions 119 316 0.5 x 0.7x 6.1x 6.9x (23%) (27%) 8% 10% 190 Trim Mean $ 10,343 $ 13,015 4.3 x 3.6 x 14.5 x 11.2 x 16.0% 7.1% 23.5% 25.4% 160 Median $ 6,221 $ 6,369 2.4 x 2.4 x 11.2 x 11.2 x 11.7% 2.1% 21.0% 23.0% 130 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Mortgage Tech Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 11 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Payments Tech
. Acquirer(s) / Overall transaction volumes and revenue should be lower due to reduced PCE, job Target / Issuer Description losses/furloughs, resulting in potential closures of SMEs in consumer service-oriented Investor(s) verticals. 3/26/20: Fast (San Francisco, CA) raised $20 million in a Series A funding round led by Stripe (San Francisco, CA). Fast is the . Individuals, small businesses, and large corporations are all adopting new habits in provider of identity and access management solution to e- the current environment, some of which could become permanent as fear and commerce businesses. uncertainty could be the catalysts that effect long awaited changes. 3/24/20: Brex (San Francisco, CA) agreed to acquire Neji /Compose Labs/Landria Assets (San Francisco, CA). Neji is a . Changing habits and forms of interactions will lead to pivots, expansions, and creation startup building blockchain and networking technologies for of technologies and processes to align with the new normal. businesses; Compose Labs is a startup that powers next- Contactless payments, order ahead and other payment enabled forms generation video experiences; Landria Assets is a startup that could develop broader applications, giving them a much-needed boost. builds internal knowledge databases for companies. 3/12/20: Nets (Ballerup, Denmark) agreed to acquire PeP (Jasionka, Poland) for €405 million. Polskie ePłatności is the payment processor delivering the innovative business services, providing support for payment transactions.
5 Year LTM Revenue & EBITDA Multiples
24.5x 58x 23.0x 54x 21.5x (USD millions) Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin 50x 20.0x 46x Company Cap Value CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E 18.5x 17.0x 42x EV / EBITDA Visa $ 346,137 $ 356,191 15.5 x 15.0x 22.6x 21.7x 11% 3% 68% 69% EV / Revenue 15.5x 38x Mastercard 242,794 244,505 14.5 x 14.0x 24.0x 24.1x 13% 4% 60% 58% 14.0x 34x PayPal 112,299 107,054 6.0 x 5.2x 31.4x 19.4x 15% 16% 19% 27% 12.5x 30x Shopify 48,808 46,492 29.5 x 21.5x (411.6x) 1,044.7x 47% 37% (7%) 2% Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Global Payments 43,288 51,929 10.6 x 6.8x 27.0x 15.1x 46% 56% 39% 45% EV / LTM Revenue EV / LTM EBITDA Adyen 25,484 23,619 7.9 x 31.9x 79.2x 56.0x 58% (75%) 10% 57% Square 22,798 22,333 4.7 x 4.2x 268.2x 56.9x 43% 12% 2% 7% FleetCor Technologies 15,936 19,800 7.5 x 7.0x 13.0x 12.1x 9% 8% 57% 58% 5 Year M&A Payments Tech Index vs. S&P 500, base = 100 Wirecard 14,210 12,029 n.a. 3.4x n.a. 11.4x (100%) n.a. n.a. 30% 600 Worldline 10,741 11,667 4.4 x 4.3x 21.2x 16.8x 36% 2% 21% 26% 550 Western Union 7,490 9,511 1.8 x 1.9x 7.3x 7.2x (5%) (3%) 24% 26% 500 WEX 4,531 6,920 4.0 x 3.8x 11.9x 8.8x 15% 6% 34% 43% 450 400 EVO 631 1,870 3.8 x 3.8x 15.4x 12.2x (14%) 1% 25% 31% 350 300 Trim Mean $ 49,852 $ 50,533 7.9 x 8.1 x 25.3 x 23.1 x 19.6% 8.5% 29.2% 37.0% 250 Median $ 22,798 $ 22,333 6.7 x 5.2 x 21.9 x 16.8 x 15.0% 4.8% 24.8% 31.4% 200 150 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Payments Tech Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 12 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Regulatory Tech
. Acquirer(s) / The current market environment is punishing businesses that are directly impacted by Target / Issuer Description the economic lockdown. Reg Tech, however, continues to be a very strong sector to Investor(s) operate in, and businesses continue to thrive. 3/20/20: VoxSmart (London, UK) raised $6.68 million in a Series B funding round led by The Investment Arm of National . Reg Tech continues to see strong deal activity for both funding as well as Westminster Bank (London, UK). VoxSmart develops the acquisitions. Some of the interesting recent transactions include: solution Vsmart to capture, record, store, transcribe and analyze all user mobile calls, messages and voicemail. Acquisition of Emailage, provider fraud prevention and risk management 3/12/20: Accuity (Evanston, IL) agreed to acquire Apply functions, by LexisNexis Risk Solutions (part of RELX) Financial (London, UK) for an undisclosed sum. Apply Financial $80 million in growth capital raised by Fenergo helps firms submit bank account and payment details when VoxSmart (broader communications surveillance) acquisition of Fonetics processing a payment, increasing efficiency and reducing the (voice surveillance, fulfilling FCA/other regs) risk of a transaction failing. 3/2/20: Broadridge (New York, NY) agreed to acquire FundsLibrary (London, UK) for an undisclosed sum. FundsLibrary is a digital platform, providing clients with fund data, documents & regulatory reporting for the Asset Management Industry.
5 Year LTM Revenue & EBITDA Multiples 50x 12.0x 46x 42x (USD millions) Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin 10.5x 38x Company Cap Value CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E 9.0x 34x 30x 7.5x FIS $ 74,969 $ 94,620 9.2 x 7.0x 27.8x 16.1x 23% 30% 33% 44% 26x
6.0x 22x EV / EBITDA
Fiserv 64,508 88,135 8.7 x 5.5x 24.9x 15.1x 75% 57% 35% 36% EV / Revenue 18x RELX 41,517 49,367 4.7 x 5.0x 15.5x 13.8x 9% (4%) 30% 36% 4.5x 14x Thomson Reuters 33,485 35,672 6.0 x 5.8x 32.6x 18.4x 7% 4% 19% 32% 3.0x 10x Experian 25,231 29,501 6.1 x 5.5x 19.6x 15.8x 6% 9% 31% 35% Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 MSCI 24,566 26,318 16.9 x 15.4x 32.1x 27.9x 9% 9% 53% 55% EV / LTM Revenue EV / LTM EBITDA Verisk Analytics 22,730 25,941 10.0 x 9.2x 24.6x 19.6x 9% 8% 40% 47% Wolters Kluwer 18,753 21,189 4.1 x 4.0x 14.5x 13.6x 6% 3% 28% 29% Equifax 14,569 17,696 5.0 x 4.8x 21.9x 14.1x 3% 5% 23% 34% 5 Year M&A Data Analytics - Reg Tech Index vs. S&P 500, base = 100 Temenos 9,449 10,472 10.8 x 9.3x 38.8x 22.6x 16% 16% 28% 41% NICE Systems 9,173 9,320 5.9 x 5.5x 22.6x 17.0x 9% 7% 26% 32% 280 Fair Isaac 8,969 9,881 8.5 x 7.9x 34.9x 23.6x 16% 8% 24% 33% 250 Workiva 1,521 1,352 4.5 x 4.0x (32.5x) (40.8x) 22% 14% (14%) -10% 220 First Derivatives 776 879 3.0 x 2.8x 24.7x 14.6x 13% 9% 12% 19% Majesco 236 195 1.4 x n.a. 13.6x n.a. 14% (100%) 10% n.a. 190 160 Trim Mean $ 21,173 $ 25,056 6.7 x 6.1 x 23.8 x 17.0 x 12.1% 9.2% 26.2% 34.9% 130 Median $ 18,753 $ 21,189 6.0 x 5.5 x 24.6 x 15.9 x 9.2% 8.3% 27.7% 34.6% 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Regulatory Tech Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 13 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Securities Exchanges
. Acquirer(s) / ICE raised an additional $300MM for its crypto trading platform BAKKT from Microsoft Target / Issuer Description M12 venture unit and the Boston Consulting Group (in addition to venture fund Investor(s) investors). The raise comes after ICE’s recent acquisition of Bridge2Solutions, a 3/16/20: FastMarkets (London, UK) agreed to acquire Census loyalty program provider, and merged that company with Bakkt. Commodity Data (London, UK) for an undisclosed sum. Census Commodity Data is a price reporting agency for the global . CME’s futures trading volume is up 46% reflecting volatility from the COVID-19 agricultural commodity markets. environment as well as other increased derivative trading volume. The exchanges are 3/16/20: Bakkt Holdings (Atlanta, GA) raised $300 million in a leveraging technology advancements even in the face of closing the trading floors. Series B funding round from multiple investors, including Intercontinental Exchange (ICE; Atlanta, GA). Bakkt developing . LSE has received CIFUS approval from the US for the Refinitiv acquisition, but the a Bitcoin futures trading platform, aiming provide an integrated European Commission is encouraging a delay in merger filings due to the coronavirus global platform for trading, warehousing and commerce. pandemic. LSE still plans to close of the transaction in the second half of 2020. 3/9/20: Nasdaq (New York, NY) agreed to acquire Solovis (Irving, Texas) for an undisclosed sum. Solovis is a financial . Adding to its eVestment 2017 acquisition, NASDAQ acquired Solovis in March. technology company that offers multi-asset class portfolio Solovis provides portfolio analytics and insights for multi-asset class portfolios. The management, analytics and reporting tools across public and combined platform facilitates institutional investment decisions for asset managers private markets. and investment consultants.
5 Year LTM Revenue & EBITDA Multiples
48x 16.5x 44x 40x 15.0x 36x (USD millions) Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin 13.5x 32x Cap Value 28x Company CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E 12.0x 24x 20x 16x CME Group $ 61,985 $ 64,780 13.3 x 12.1x 20.7x 17.6x 13% 10% 64% 69% 10.5x EV / EBITDA EV EV / Revenue 12x Intercontinental Exchange 44,343 51,764 10.0 x 9.2x 16.3x 14.4x 5% 8% 61% 64% 9.0x 8x 4x Hong Kong Exchange 37,942 34,695 16.6 x 15.0x 23.4x 19.8x 3% 11% 71% 76% 7.5x 0x London Stock Exchange 31,652 33,097 10.8 x 11.0x 22.3x 19.5x 13% (2%) 48% 56% Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Deutsche Börse Group 25,196 27,258 7.4 x 7.8x 15.5x 12.6x 3% (6%) 48% 62% EV / LTM Revenue EV / LTM EBITDA The Nasdaq OMX Group 15,668 18,993 4.5 x 7.2x 14.3x 13.4x (0%) (38%) 31% 53% BM&F Bovespa 14,188 13,343 9.1 x 10.4x 15.6x 13.8x 18% (13%) 58% 75% CBOE 9,856 10,479 4.2 x 8.3x 13.4x 12.5x (10%) (49%) 31% 66% 5 Year M&A Securities Exchanges Index vs. S&P 500, base = 100 Japan Exchange Group 9,484 9,557 8.7 x 8.1x 13.3x 13.1x (4%) 8% 66% 62% Australian Exchange 9,155 8,477 11.1 x 14.7x 14.5x 19.7x 2% (25%) 77% 75% 280 Singapore Exchange 6,916 6,457 9.6 x 9.6x 18.1x 15.8x 8% 0% 53% 61% 250 Euronext 5,187 5,964 7.8 x 6.8x 13.3x 12.0x 8% 16% 59% 56% 220 TMX Group 4,158 4,771 5.3 x 7.9x 7.6x 13.5x 19% (32%) 70% 58% 190 Trim Mean $ 19,053 $ 20,008 8.9 x 9.7 x 16.1 x 15.1 x 6.3% -7.1% 57.2% 64.1% 160 Median $ 14,188 $ 13,343 9.1 x 9.2 x 15.5 x 13.8 x 4.6% -1.7% 58.8% 62.2% 130 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Sercurities Exchanges Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 14 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Wealth Tech
. Acquirer(s) / With asset levels taking a beating recently in the investor markets due to the Target / Issuer Description uncertainty, acquisition activity should continue to gain steam from 2019 levels, Investor(s) especially as 2020 rolls on. This will pressure small wealth tech businesses that are 3/19/20: Addepar (Mountain View, CA) raised $40 million in a driven off AUM to continue with a strong year of M&A. Series D funding round led by WestCap Group (San Francisco, CA). Addepar is a wealth management platform that provides . US based advisors are continuing to shift from broker dealers to RIAs, and often to investment management advisors with tools for managing smaller RIAs. This will continue the M&A push by leading wealth tech firms (such as complex portfolios. Envestnet) to provide a full stack of already integrated solutions from data 3/10/20: Finantix (Venice, Italy) agreed to acquire InCube Group aggregation, compliance, communications, planning, to portfolio management and so AG (Zürich, Switzerland) for an undisclosed sum. InCube Group on. AG provides data-driven, AI-enabled products and solutions to wealth management and insurance companies. . Social Media Digital Sales Enablement solutions are gaining speed in wealth 3/2/20: Refinitiv (London, United Kingdom) agreed to acquire management, leveraging AI and other mass scale solutions like cloud to deliver on Scivantage (Jersey City, NJ) for an undisclosed sum. Scivantage long awaited promise of a one-to-one mass customization marketing world. is a SaaS provider of Digital Wealth Management and full End- to-End Tax solutions.
5 Year LTM Revenue & EBITDA Multiples
24.5x 58x (USD millions) EV / Revenue EV / EBITDA Revenue Growth EBITDA Margin Market Enterprise 23.0x 54x 21.5x Company Cap Value CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E CY2019A CY2020E 50x 20.0x 46x Charles Schwab $ 43,278 n.a. n.a. n.a. n.a. n.a. 6% (6%) n.a. 45% 18.5x BNY Mellon 29,809 n.a. n.a. n.a. n.a. n.a. 1% (7%) n.a. n.a. 17.0x 42x EV / EBITDA MSCI 24,566 26,318 16.9 x 15.4x 32.1x 27.9x 9% 9% 53% 55% EV / Revenue 15.5x 38x State Street 18,876 n.a. n.a. n.a. n.a. n.a. (3%) (3%) n.a. n.a. 14.0x 34x Northern Trust 15,791 n.a. n.a. n.a. n.a. n.a. 2% (1%) n.a. n.a. 12.5x 30x Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 SS&C Technologies 11,204 18,613 4.0 x 3.9x 11.0x 9.8x 35% 2% 36% 40% Broadridge 10,887 12,754 2.9 x 2.8x 14.0x 12.2x 1% 6% 21% 23% EV / LTM Revenue EV / LTM EBITDA SEI Investments 6,950 6,156 3.7 x 3.7x 12.5x 10.4x 2% 2% 30% 35% SimCorp 3,343 3,387 6.6 x 6.5x 22.8x 22.7x 16% 2% 29% 29% Envestnet 2,845 3,429 3.8 x 3.4x 39.9x 16.1x 11% 11% 10% 21% 5 Year M&A Wealth Tech Index vs. S&P 500, base = 100 AssetMark 1,476 1,494 3.6 x 4.8x 35.1x 12.3x 15% (25%) 10% 39% IRESS 1,109 1,263 3.5 x 3.7x 15.7x 14.8x 9% (5%) 23% 25% 280 Equiniti Group 798 1,231 1.7 x 1.7x 9.3x 7.1x 9% (4%) 18% 24% 250 First Derivatives 776 879 3.0 x 2.8x 24.7x 14.6x 13% 9% 12% 19% 220 Blucora 576 898 1.3 x 1.1x 7.6x 6.1x 28% 15% 16% 18% 190 Donnelley Financial Solutions 181 540 0.6 x 0.6x 5.8x 4.0x (9%) (2%) 11% 16% 160 Trim Mean $ 9,215 $ 5,010 3.4 x 3.4 x 18.5 x 12.6 x 8.3% 1.0% 20.6% 28.9% 130 Median $ 5,146 $ 2,440 3.6 x 3.5 x 14.8 x 12.2 x 8.7% 0.8% 19.4% 25.1% 100 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 M&A Wealth Tech Index S&P 500
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/2020. These companies are only a sample of firms in the sector as M&A defines it. M&A calculates Trim Mean and Median multiples for the sector over time using data from a set of companies that M&A believes to be reasonable and may not be identical to the set reflected above. Trim Mean excludes the highest and lowest multiple of the data set. 15 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Sectors’ Relative Multiples
EV/2020E Revenue EV/2020E EBITDA
35.0x
12.0x
30.0x 28.6x
10.0x 9.7x 25.0x 23.1x 8.1x 20.9x 8.0x 7.7x 20.0x 18.7x 17.0x 6.1x 6.1x 6.0x 15.1x 15.0x 14.2x 13.0x 12.6x 12.4x 4.4x 11.2x 4.0x 3.6x 3.6x 3.6x 3.4x 10.0x 2.7x
2.0x 5.0x
0.0x 0.0x Securities Payments Data Regulatory Digital Bank InsurTech Mortgage Capital Wealth Information Digital Payments InsurTech Data Regulatory Securities Bank Capital Wealth Information Mortgage Exchanges Tech & Analytics Tech Tech Tech Tech Markets Tech Services Tech Tech & Analytics Tech Exchanges Tech Markets Tech Services Tech Tech Tech
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/20. These companies are only a sample of firms in the sector as M&A defines it. Sector Averages represent the Trim Mean, which excludes the highest and lowest multiple of the data set. 16 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Sectors’ Relative Operating Metrics
Revenue Growth (CY 2019A – CY 2020E) EBITDA Margin (CY 2019A – CY 2020E)
30% 70% 64.1% 25.8% 25% 60%
20% 50%
15% 13.4% 39.8% 40% 37.0% 9.2% 34.9% 10% 8.5% 7.1% 29.0% 5.0% 30% 27.8% 27.5% 5% 25.4% 24.4% 23.3% 1.8% 1.0% 0.5% 20% 0%
-5% 10% -4.7% 6.0% -7.1% -10% Digital Tech Bank Tech Regulatory Payments Mortgage Data & Capital Wealth Information InsurTech Securities 0% Tech Tech Tech Analytics Markets Tech Services Exchanges Securities Data Payments Regulatory Wealth Bank Capital Mortgage Insur Information Digital Tech Exchanges & Analytics Tech Tech Tech Tech Markets Tech Tech Services Tech Tech
Source: Marlin & Associates, Capital IQ, and public sources. All market and operating data are as of 03/31/20. These companies are only a sample of firms in the sector as M&A defines it. Sector Averages represent the Trim Mean, which excludes the highest and lowest multiple of the data set. 17 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
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Barcelona, Spain Stamford, CT New York, NY Denver, CO a division of Greenwich Associates was Danbury, CT acquired by has received a majority equity has been acquired by has agreed to be acquired by has been acquired by has been acquired by investment from
Livonia, MI
A portfolio company of Lake Success, NY Bologna, Italy Mumbai, India Chicago, IL New York, NY Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as exclusive strategic and financial strategic and financial advisor to exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial advisor to ClearStructure Financial Strands, Inc. advisor to Greenwich Associates, LLC advisor to Hanweck Associates, LLC advisor to NinjaTrader Group, LLC advisor to Greenwich Associates, LLC Technology, LLC.
Reston, VA Brisbane, Australia London, UK Chicago, IL Alpharetta, GA has been acquired by Orlando, FL has agreed to be acquired by has agreed to be acquired by has been acquired by has received a majority equity has received growth capital from investment from Pittsburgh, PA Mclean, VA A portfolio company of New York, NY A portfolio company of A portfolio company of Los Angeles, CA Vancouver, BC Edinburgh, UK
Marlin & Associates acted as exclusive Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as strategic and financial advisor to exclusive strategic and financial Marlin & Associates acted as exclusive financial advisor to strategic and financial advisor to exclusive strategic and financial strategic and financial advisor to Kore.ai advisor to InRule Technology, Inc. GBST Holdings Limited StatPro Group plc advisor to Points2Shop, LLC Zoomdata, Inc.
London, UK London, UK Wilton, CT has sold Preqin Solutions to has sold a minority equity interest in New York, NY New York, NY Shelton, CT its subsidiary has received a majority equity has received a $61mm investment from has been acquired by has acquired investment from Boston, MA A portfolio company of London, UK to
New York, NY Troy, MI Boston, MA Marlin & Associates acted as Kansas City, MO Singapore exclusive strategic and financial Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as advisor to Private Client exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial Resources, LLC. advisor to SERMO, Inc. advisor to TABS Analytics advisor to Preqin, Ltd. advisor to TradingScreen Inc. advisor to SALIDO, Inc.
18 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Clients Choose Us To Advise Them On Their Most Important Strategic Decisions
Charlotte, NC Boston, MA New York, NY Toronto, Canada has received an equity investment has sold Financial Engineering has received an equity investment New York, NY New York, NY Associates, Inc. to from received a from has received a $30 million has acquired series B investment led by equity investment from Dallas, TX A portfolio company of
Boston, MA Jacksonville, FL Boston, MA & San San Francisco, CA New York, NY Francisco, CA Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial strategic and financial advisor to exclusive strategic and financial exclusive strategic and financial advisor to Zenmonics advisor to Rapid Ratings advisor to Aquiline Holdings LLC Empow advisor to MSCI Inc. advisor to Tier1CRM
Affiliate of
Darien, CT Hamilton, Bermuda London, United Kingdom has received an equity investment A portfolio company of Chicago, IL from Toronto, Canada received an investment from Addison, TX has sold the Atrium wireless and has been acquired by extranet infrastructure businesses to Received a $250mm credit Atlanta, GA facility from affiliate of has been acquired by
New York, NY Boston, MA White Plains, NY Geneva, Switzerland Marlin & Associates acted as Atlanta, GA Marlin & Associates acted as Marlin & Associates acted as exclusive strategic and financial Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as exclusive strategic and financial exclusive strategic and financial advisor to OptionsCity Software exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial advisor to Investment Metrics advisor to Think Finance advisor to TMX Group advisor to QuoVadis and ABRY advisor to OpenGamma
New York, NY Salt Lake City, UT San Mateo, CA Brentwood, TN New York City, NY Port Talbot, United Kingdom has been acquired by received a strategic has been acquired by has been acquired by received an investment from has been acquired by investment from a portfolio company of
a portfolio company of London, United Kingdom Chicago, IL Tokyo, Japan New York, NY Lake Success, NY Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial strategic and financial advisor to exclusive strategic and financial exclusive strategic and financial advisor to Vizolution advisor to iTransact Group, LLC advisor to Xignite. Agilum Healthcare Intelligence. advisor to Advise Technologies, LLC advisor to M&O Systems, Inc.
19 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
Clients Choose Us To Advise Them On Their Most Important Strategic Decisions
New York, NY Phoenix, AZ Singapore has been acquired by Paris, France Campbell, CA Boston, MA
has completed a majority has acquired the Business Process received an investment from has been acquired by recapitalization with Management business from
has secured an early stage Palo Alto, CA funding round a portfolio company of
Boston, MA and San Francisco, CA Palo Alto, CA Windsor, CT Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial advisor to BillingTree advisor to Crayon Data. advisor to Alacra. advisor to Everteam. advisor to Trunomi. advisor to Varden Technologies.
has sold the assets of New York, NY Dublin, Ireland London, United Kingdom San Francisco, CA Vienna, Austria
has invested in has been acquired by invested in has led a $60 million investment in received a majority investment from
to
Dublin, Ireland London, United Kingdom London, United Kingdom New York, NY New York, NY Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as financial advisor to Aquiline Capital exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial exclusive financial advisor exclusive strategic and financial Partners. advisor to CNO Financial Group. advisor to Information Mosaic. advisor to CIT Growth Capital. Francisco Partners. advisor to AIM Software.
Campbell, CA Vienna, Austria New York, NY Hong Kong, China Lucca, Italy Wixom, MI
has been acquired by has acquired has entered into a strategic has raised capital from secured a $36 million investment has acquired alliance with from
Englewood, CO New York, NY New York, NY Hong Kong, China Milan, Italy Hamilton, NJ Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as Marlin & Associates acted as exclusive strategic and financial exclusive strategic and financial exclusive strategic and financial strategic and financial advisor to exclusive strategic and financial exclusive strategic and financial advisor to Infonetics Research, Inc. advisor to AIM Software. advisor to Alacra Inc. Wisers Information Limited. advisor to Tagetik Software srl. advisor to RevSpring Inc.
20 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
The M&A Team Brings Relevant Transaction Expertise And Operating Experience
Michael Maxworthy Anup Agarwal Ken Marlin Managing Director Managing Director Founder & Managing Member
Tom Selby Aalap Merchant Managing Director Managing Director
Dan Zircher Billy Adams Managing Director
Chris Fieschko Jordan Wittbrot New York City | Washington, DC Chicago | Toronto, Canada
Peter Manuselis Sam Wilcox
Woolley Capital Partners
Neil Chadda Al Sisca
21 Contents Our April Report on M&A in the FinTech, Data and Analytics Industry
We Deliver Exceptional Results
Advisory Firm of the Year (US) TMT Advisory Firm of the Year (US)
Gamechanger of the Year (US), Ken Marlin Deal of the Year (Parthenon / BillingTree)
Middle-Market Investment Bank of the Year (US) Boutique Investment Banking Firm of the Year
Capital Raising Advisory Firm of the Year Small Tech Fund Raising of the Year for CRM
Professional Services (B2B) Deal of the Year Boutique Investment Banking Firm of the Year (2017)
Gamechanger of the Year (US), Ken Marlin Boutique Investment Banking Firm of the Year
Middle-Market Investment Bank of the Year Cross-Border Deal of the Year (2016)
“Bringing on the Marlin & Associates team “The team at Marlin & Associates helped us get “We have been delighted with the service remains one of our great decisions. The the best value for our company. They know the provided to us by Ken Marlin and his team. They dedication of the team was on full display as we players and values of this industry at a level few have been diligent and thorough, and also a approached this latest chapter for ClearStructure. can match. They guided us and brought multiple pleasure to work with. The Marlin team’s deep The guidance, creativity and true value-add that highly qualified buyers into the process - knowledge of our industry makes them the they brought to the table helped ClearStructure including FNZ, with whom we look forward to number one go-to firm when you want to sell your achieve goals we didn’t think were possible.“ joining. We thank the Marlin & Associates team business. They have seen and managed more or and look forward to working with them again in less every possible situation and know the play the future.” book on how to deal with them. The process was meticulously planned and executed.”
-Scott Turley, CEO of ClearStructure -Rob DeDominicis, CEO of GBST -Justin Wheatley, CEO of StatPro 22 Sell-Side & Buy-Side M&A Strategic Advisory
Equity & Debt Capital Raise Restructuring & Recapitalizations
Joint Ventures & Partnerships Independent Board Advisory
Fairness Opinions Divestitures & Carve-outs
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