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Bi-Weekly Finanial Technology Sector Report

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Bi-Weekly Finanial Technology Sector Report Financial Technology Sector Summary December 14, 2016 1 TABLE OF CONTENTS I. GCA Overview II. Market Summary III. Payments / Banking IV. Securities / Capital Markets / Data & Analytics V. Insurance / Benefits 2 SECTION I: GCA Overview 3 GCA OVERVIEW Financial Technology Team London Tokyo San Francisco New York th 1 Southampton St. 11-1 Marunouchi 1-chome One Maritime Plaza, 25th Fl. 640 Fifth Avenue, 10 Fl. London WC2R0LR Chiyoda-ku, Tokyo 100-6230 San Francisco, CA 94111 New York, NY 10019 United Kingdom Japan (415) 318-3600 (212) 999-7090 +44 20 7484 4040 +81 (3) 6212-7100 Sean Minnihan Scott Patrick Peter Bang Derek Bell Paul DiNardo Steve Fletcher Managing Director Managing Director Managing Director Managing Director Advisory Director Managing Director Global Head of FinTech Phone: (212) 999-7077 Phone: (212) 999-7087 Phone: (212) 999-7074 Phone: (212) 999-7089 Phone: (212) 999-7097 Phone: (415) 318-3661 Mobile: (917) 364-6230 Mobile: (917) 340-0358 Mobile: (917) 783-4057 Mobile: (914) 953-0689 Mobile: (650) 483-7246 Mobile: (415) 518-6725 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] Rob Freiman Michio Suzuki* David Krueger Saif Malik* Alexander Berry Malik Gill Director Director Vice President Vice President Associate Analyst Phone: (212) 999-7075 Phone: +81 3-6212-7145 Phone: (212) 537-4534 Phone: +44 (0) 207 038-3216 Phone: (212) 999-7079 Phone: (212) 537-4529 Mobile: (973) 229-0436 Mobile: +81 90-7412-9411 Mobile: (616) 822-7179 Mobile: +44 (0) 778 606-8553 Mobile: (818) 851-2300 Mobile: (646) 668-6714 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] * Saif Malik is a Vice President at GCA Savvian Europe Limited * Michio Suzuki is a Director at GCA Corporation 4 SECTION II: Market Summary 5 MARKET SUMMARY Industry Stock Market Performance 160 Last 12 Months Last 3 Years 125 150 115 140 105 130 120 95 110 85 100 75 90 65 80 12/14/15 1/27/16 3/11/16 4/26/16 6/9/16 7/25/16 9/7/16 10/21/16 12/6/16 12/12/13 4/1/14 7/18/14 11/5/14 2/23/15 6/11/15 9/29/15 1/15/16 5/4/16 8/22/16 12/8/16 (1) (2) Indexed Price Performance Payments Exchanges Sector 3 Months 1 Year 3 Years (3) (4) Online Broker Dealers 28.3% 22.1% 56.7% Financial Data, Content, Information Processors / Exchanges 2.8% 14.4% 31.7% & Analytics Credit Bureaus Banking & Lending Technology 2.2% 13.8% 47.3% Payments 1.3% 7.5% 27.9% (6) (5) Banking & Lending Online Broker Dealers Investment Services, Software, & Technology (2.0%) 3.3% 32.8% Technology Financial, Data, Content, & Analytics (2.7%) 13.2% 36.6% Healthcare / Insurance Technology (3.7%) 3.8% 19.5% (7) (8) Information Processors / Credit Bureaus (7.6%) 13.2% 28.4% Investment Services, Healthcare / Insurance Software, & Technology Technology Notes: (1) Payments: ADS, AIM: PPT, AXP, BOVESPA: CIEL3, CATM, DFS, EEFT, ENXTPA: EDEN, FDC, FLT, GDOT, GPN, HPY, MA, MGI, OUTR, PYPL, PAR, SQ, TSE:3769, TSXV:TNC, TSS, UEPS, V, VNTV, WEX, LSE: WPG, WU, XTRA: WDI. (2) Exchanges: ASX: ASX, ATSE: EXAE, BATS:BATS, BMV: BOLSA A, BOVESPA: BVMF3, CATS: BME, CBOE, CME, ICE, JSE: JSE, KLSE: BURSA, LSE: LSE, NDAQ, SEHK: 388, SGX: S68, TSX: X, WSE: GPW, XTRA: DB1. (3) Financial Data, Content & Analytics: DNB, ENXTPA: FIM, FDS, HHS, HIS, MCO, MHP, MORN, MSCI, MRKT, RATE, TRI. (4) Information Processors / Credit Bureaus: ACXM, EFX, FICO, INTX, LSE: EXPN. (5) Online Broker Dealers: AMTD, ETFC, FXCM, GCAP, IBKR, SCHW. (6) Banking & Lending Technology: ACIW, BKFS, ELLI, EPAY, FIS, FISV, INTU, JKHY, LC, ONDK, PFMT, QTWO, SWX: TEMN, YDLE. (7) Investment Services, Software, & Technology: ADVS, BR, DST, ENV, FNGN, SEIC, SSNC. 6 (8) Healthcare / Insurance Technology: BSE:532254, ATHN, EBIX, CRD.B, GWRE, IMS, SLH, TSXV:SY, VRSK. MARKET SUMMARY EBITDA Multiples and Margins 2016E EBITDA Multiples 2016E EBITDA Margins Healthcare / Insurance Technology 17.0x Exchanges 55.9% Information Processors / Credit Bureaus 14.3x Online Broker Dealers 41.7% Investment Services, Software, & 13.9x Financial Data, Content, & Analytics 33.6% Technology Payments 13.3x Banking and Lending Technology 31.4% Investment Services, Software, & Exchanges 13.1x 30.4% Technology Financial Data, Content, & Analytics 13.0x Information Processors / Credit Bureaus 28.8% Banking and Lending Technology 12.9x Payments 25.6% Online Broker Dealers 11.7x Healthcare / Insurance Technology 19.9% 0.0x 5.0x 10.0x 15.0x 20.0x 0% 10% 20% 30% 40% 50% 60% Notes: 7 Numbers represent medians of sub-sectors. Details available in later pages. MARKET SUMMARY Price / Earnings Multiples and PEG Ratios 2016E Price / Earnings Multiples 2016E PE / Growth (“PEG” Ratio) | Long-Term EPS Growth Banking and Lending Technology 29.8x Healthcare / Insurance Technology 2.1 12.8% Online Broker Dealers 25.8x Financial Data, Content, & Analytics 2.1 11.8% Investment Services, Software, & 24.5x Exchanges 2.1 10.3% Technology Information Processors / Credit Bureaus 23.3x Information Processors / Credit Bureaus 1.9 13.5% Financial Data, Content, & Analytics 21.8x Banking and Lending Technology 1.9 16.1% Investment Services, Software, & Exchanges 21.8x 1.8 15.0% Technology Healthcare / Insurance Technology 21.7x Online Broker Dealers 1.6 17.5% Payments 18.6x Payments 1.4 15.0% 0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 0.0 0.5 1.0 1.5 2.0 2.5 Notes: 8 Numbers represent medians of sub-sectors. Details available in later pages. MARKET SUMMARY LTM Price Performance and 2016 P/E – Payments / Banking ($MM) ($MM) LTM Price LTM Price Networks Market Cap. Performance P/E 2016 Prepaid Market Cap. Performance P/E 2016 Visa Inc. $184,151 1% 27.0x Blackhawk Network Holdings, Inc. $2,124 (17%) 24.6x Mastercard Incorporated $113,767 7% 27.8x Green Dot Corporation $1,309 54% 17.7x American Express Company $68,434 7% 12.6x Net 1 Ueps Technologies Inc. $618 (20%) 6.5x PayPal Holdings, Inc. $47,844 12% 26.5x Sector Average $1,350 6% 16.3x Discover Financial Services $28,720 34% 12.7x Sector Average $88,583 12% 21.4x LTM Price ATM / Kiosks Market Cap. Performance P/E 2016 LTM Price Cardtronics plc $2,444 48% 16.6x Merchant Processing Market Cap. Performance P/E 2016 TIO Networks Corp. $172 49% 28.4x Cielo S.A. $18,790 3% 15.5x Everi Holdings Inc. $157 (38%) 3.4x First Data Corporation $13,319 (12%) 11.3x Sector Average $924 20% 16.1x Global Payments Inc. $11,095 1% 23.1x Vantiv, Inc. $9,237 11% 21.3x LTM Price Total System Services, Inc. $9,127 (11%) 17.6x POS Hardware / Technology Market Cap. Performance P/E 2016 Worldpay Group plc $6,686 (26%) 22.4x Wirecard AG $5,468 (10%) 22.6x NCR Corporation $5,108 52% 13.7x Square, Inc. $4,891 15% NM Ingenico Group $4,675 (40%) 17.5x EVERTEC, Inc. $1,371 9% 11.1x VeriFone Systems, Inc. $1,827 (39%) 10.7x GMO Payment Gateway, Inc. $1,256 (26%) 48.2x PAR Technology Corporation $84 (17%) NA CardConnect Corp. $286 NA NM Sector Average $2,923 (11%) 14.0x Planet Payment, Inc. $222 58% 26.0x JetPay Corporation $45 (13%) NM LTM Price Sector Average $6,292 (0%) 21.9x Banking and Lending Technology Market Cap. Performance P/E 2016 Intuit Inc. $30,025 21% 29.8x LTM Price Fidelity National Information Services, Inc $24,801 20% 19.7x Money Transfer Market Cap. Performance P/E 2016 Fiserv, Inc. $22,745 12% 23.6x The Western Union Company $10,672 16% 13.3x Jack Henry & Associates, Inc. $6,989 15% 29.3x Euronet Worldwide, Inc. $3,882 (0%) 18.6x Temenos Group AG $4,372 33% 32.3x MoneyGram International, Inc. $617 45% 14.3x Ellie Mae, Inc. $2,801 31% 38.1x Sector Average $5,057 20% 15.4x Black Knight Financial Services, Inc. $2,688 13% 34.0x ACI Worldwide, Inc. $2,327 (10%) 43.5x LTM Price LendingClub Corporation $2,180 (61%) NM Closed Loop Market Cap. Performance P/E 2016 DH Corporation $1,839 (26%) 11.0x Q2 Holdings, Inc. $1,278 14% NM FleetCor Technologies, Inc. $14,249 5% 22.3x Bottomline Technologies (de), Inc. $917 (15%) 24.2x Alliance Data Systems Corporation $13,412 (17%) 13.7x On Deck Capital, Inc. $307 (58%) NM WEX Inc. $4,956 33% 25.4x Performant Financial Corporation $194 99% 48.3x Edenred SA $4,694 8% 21.4x Sector Average $7,390 6% 30.3x Sector Average $9,328 7% 20.7x LTM Price Information Processors / Credit Bureaus Market Cap. Performance P/E 2016 0 Experian plc $17,944 6% 21.0x Equifax Inc. $14,031 6% 21.4x Fair Isaac Corporation $3,779 35% 25.2x Acxiom Corporation $2,115 22% 41.6x Sector Average $9,468 17% 27.3x Notes: 9 Source: CapitalIQ and Wall Street Research. Market data as of December 9, 2016. MARKET SUMMARY LTM Price Performance and 2016 P/E – Securities / Cap. Mkts. / Data & Analytics ($MM) ($MM) LTM Price Investment Services, Software, & LTM Price Exchanges - Americas Market Cap. Performance P/E 2016 0 Technology Market Cap. Performance P/E 2016 CME Group Inc. $41,652 29% 27.9x SEI Investments Co. $8,006 (4%) 25.3x Intercontinental Exchange, Inc. $35,538 18% 21.7x Broadridge Financial Solutions, Inc.
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