QUARTERLY FINANCIAL TECHNOLOGY EXECUTIVE BRIEFING ANALYSIS THROUGH Q4 2019 JANUARY 3, 2020 Table of Contents
Morgan Partners Overview – Leaders in FinTech M&A 3
Sub-Sector Comparison: Q4 2019
FinTech Sub-Sector Performance 5
Median Multiples by Sub-Sector 6
Variability by Sub-Sector 7
Sub-Sector Valuation Multiples Relative to Growth 8
Sub-Sector Aggregate Market Cap 9
Public & Private FinTech Transactions Spotlight 10
Sub-Sector Analysis
Capital Markets Technology 14
Insurance Technology 16
Banking Technology 18
Payments 20
Data & Analytics 22
Service Providers 24
Tech-Led Financial Institutions 26
Contact Information 27
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Morgan Partners LLC is a broker-dealer registered with the Securities and Exchange Commission and is a FINRA / SIPC member firm.
Quarterly Financial Technology Executive Briefing 2 Leaders in FinTech M&A
• Founded in 2005, Morgan Partners is the leading investment bank specializing in the middle-market insurance, capital markets and banking technology space • Morgan Partners represents publicly traded, privately owned, and PEG- backed FinTech companies on the sell-side and buy-side in: • Strategic exits • Capital raises and recapitalizations • Buyouts • Acquisitions • Enterprise value of the typical transaction is $50 – 250M • All engagements are led by one of the firm’s partners, both of whom have previously founded and exited their own technology businesses • The firm has an exceptional FinTech industry reputation and track record of successful deals with satisfied, referenceable clients Selected FinTech Deal Experience Sub-Sector Comparison
Quarterly Financial Technology Executive Briefing 4 FinTech Sub-Sector Performance Through Q4 20191
60.0%
53.2% 50.0% 46.3% 45.2%
40.0% 37.5% 34.5%
30.0% 28.7%
20.0%
15.9%
10.0%
5.2%
0.0%
(10.0%)
S&P 500 Insurance Technology Service Providers Capital Markets Technology Banking Technology Payments Data & Analytics Tech-led Financial Institutions
• Data & Analytics continues to lead all FinTech sub-sectors through Q4 2019 totaling 53.2% growth, 6.9% more than any other sub-sector • Payments and Capital Markets Technology perform strongly in Q4 to become the next- best performing sub-sectors while Insurance Technology slips below its peak in Q3 • Tech-led Financial Institutions and Service Providers continue to lag all the other sub- sectors and the S&P 500
These seven indices are maintained by Morgan Partners, and shown on pages 14, 16,18, 20, 22, 24, and 26 1 Capital Markets Technology, Insurance Technology, Banking Technology, Payments, Data & Analytics, Service Providers, and Tech-led Financial Institutions performance reflects the constituents in this briefing, and are calculated as the market cap-weighted daily percentage price change from the base value for each constituent. Constituents must have pricing data for the entire measurement period for inclusion in the aggregate. Source: S&P Capital IQ, Morgan Partners
Quarterly Financial Technology Executive Briefing 5 Sub-Sector Comparison (Median Multiples)
Data & Analytics 7.2x 1
Banking Technology 7.0x
Capital Markets Technology 4.6x
Insurance Technology 3.4x
Financial Technology Financial Payments 8.1x
Service Providers 2.4x
Tech-led Financial Institutions 4.6x Enterprise Value / LTM Revenue LTM / Value Enterprise
S&P 500 3.2x
Data & Analytics 25.4x 1 Banking Technology 27.4x
Capital Markets Technology 18.8x
Insurance Technology 14.7x
Financial Technology Financial Payments 25.5x
Service Providers 13.7x
Tech-led Financial Institutions 16.9x Enterprise Value / LTM EBITDA LTM / Value Enterprise
S&P 500 13.9x
• Median revenue multiples for each sub-sector have grown since Q3, with the exception of Insurance Technology which remained at 3.4x • Data & Analytics exhibited the most substantial uptick in median revenue multiple, growing from 6.4x to 7.2x • Insurance Technology saw a notable decrease in median EBITDA multiple which contracted from 19.1x to 14.7x, while every other sub-sector saw an expansion 1Enterprise value, revenue and EBITDA are universe medians drawn from publicly traded companies as of 12/31/2019 where the constituents of each sub-sector are those in this briefing. LTM denotes latest 12 months. Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 6 Sub-Sector Variability (25th and 75th Percentile Multiples)1
Data & Analytics 6.3x 10.5x 2
Banking Technology 4.3x 11.7x
Capital Markets Technology 2.1x 5.1x
Insurance Technology 2.5x 7.4x
Payments 4.8x 12.8x Financial TechnologyFinancial
Service Providers 1.9x 3.2x
Tech-led Financial Institutions 1.4x 8.7x
Enterprise Value / LTM Revenue LTM / Value Enterprise S&P 500 1.5x 5.4x
Data & Analytics 21.9x 30.0x 2 Banking Technology 23.6x 37.8x
Capital Markets Technology 15.5x 27.3x
Insurance Technology 11.2x 24.9x
Payments 19.1x 38.3x Financial TechnologyFinancial
Service Providers 10.7x 17.2x
Tech-led Financial Institutions 10.9x 20.8x Enterprise Value / LTM EBITDA LTM / Value Enterprise
S&P 500 9.8x 19.0x
• Revenue and EBITDA multiples ranges generally increased across the board, with a few minor exceptions • The tracked FinTech sub-sectors are broadly earning higher revenue and EBITDA multiples than the S&P 500
1Variability represented by 25th and 75th percentile multiples from each sub-sector 2Enterprise value, revenue and EBITDA are universe medians drawn from publicly traded companies as of 12/31/2019, where the constituents of each sub-sector are those in this briefing. LTM denotes latest 12 months. Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 7 Sub-Sector Valuation Multiples Relative to Growth
1 20%
18%
16%
14%
12% Payments
10% Insurance Technology Traditional Financial Banking Technology 8% Institutions Service Providers 6%
4% Capital Markets Data & Analytics Technology 2%
0% Median Rev Growth to EV / LTM Revenue LTM / EV to Growth Rev Median 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x
1 30% Capital Markets Technology 25%
20%
15% Payments Service Providers Traditional Financial 10% Institutions
5% Banking Technology Insurance Technology Data & Analytics 0%
10.0x 12.0x 14.0x 16.0x 18.0x 20.0x 22.0x 24.0x 26.0x 28.0x 30.0x Median EBITDA Growth to EV / LTM EBITDA LTM / EV to Growth EBITDA Median
• Data & Analytics continues to command high revenue and EBITDA multiples despite slower growth relative to the other sub-sectors • Banking Technology continues to edge out the other sub-sectors in median EBITDA multiples
1 Enterprise value, revenue and EBITDA are universe medians drawn from publicly traded companies as of 12/31/2019, where the constituents of each sub-sector are those in this briefing. LTM denotes latest 12 months. Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 8 Sub-Sector Aggregate Market Cap
$60,126 $43,982 $237,008
$301,832
$1,189,307
$392,823
$578,156
Sector Aggregate Market Cap ($M)Cap Market Aggregate Sector -
Sub Payments Service Providers
Tech-led Financial Finstitutions Data & Analytics
Banking Technology Capital Markets
Insurance Technology
Market Cap Market Cap Sub-Sector ($M) Growth % (1/1/2019) (12/31/2019) Payments $767,532 $1,189,307 55.0% Service Providers 495,832 578,156 16.6% Tech-led Financial Finstitutions 330,372 392,823 18.9% Data & Analytics 200,836 301,832 50.3% Banking Technology 117,671 237,008 101.4% Capital Markets 44,809 60,126 34.2% Insurance Technology 32,518 43,982 35.3% Total 1,222,038 1,613,927
• All sub-sectors experienced robust increases in aggregate market capitalization through 2019 • Banking Technology experienced notable market capitalization growth due to significant M&A activity, including Fiserv’s acquisition of First Data and FIS’ acquisition of Worldpay
Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 9 Public & Private FinTech Transactions Spotlight
Quarterly Financial Technology Executive Briefing 10 Public FinTech M&A Activity
2019 = 54 2017 - 2018 = 100 Number of Deals 2015 - 2016 = 75 2013 - 2014 = 54
5
4 1 2019 9 6 2 1 3 8 3 2 4 5 7 2017-2018 7 3 11 5 4 4 2 11 6 1 5 11 7 6 1 3 3 5 4 4 3 7 6 2015-2016
Number of Transactions of Number 7 5 4 3 4 5 8 7 4 4 2 7 8 3 6 2 3 3 3 3 3 2013-2014 2 1 1 2 2 2 1
2019 = $99,716 1,2 2017 - 2018 = $33,074 Total Deal Size $99,716 ($M)hgr 2015 - 2016 = $42,718 2013 - 2014 = $6,703
$35,932 $28,989
$12,515 $6,786 $4,085 $4,452 $2,251
Annual Aggregated Deal Size Over Time Over Size Deal Aggregated Annual 2012 2013 2014 2015 2016 2017 2018 2019
1Transaction count includes both acquisitions and divestitures and leads to double counting for select transactions within public FinTech universe, while aggregated deal size controls for double counting 22019 spike is due to the $43.6 billion Fidelity National acquisition of Worldpay and the $41.8 billion Fiserv acquisition of First Data Corporation Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 11 Financial Sponsor Spotlight
Financial Recent Relevant FinTech Latest Fund Sponsor Transaction Investments Raised
Fund VII $2.5B
Acquisition December 2019
Fund II $425M
Minority Investment November 2019
Technology Growth Fund III $115M Minority Investment November 2019
Fund XIII $12.6B
Acquisition October 2019
Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 12 Sub-Sector Analysis
Quarterly Financial Technology Executive Briefing 13 Capital Markets Technology: Public Company Statistics
22.7x 23.1x 6.0x 22.1x 22.0x 25.0x 20.6x 21.2x 21.2x 20.9x 5.5x 19.8x 20.5x 20.2x 19.9x 20.3x 19.0x 19.0x 19.5x 18.4x 18.2x 18.6x 18.8x 17.4x 20.0x 5.0x 16.4x 17.1x 15.7x 4.5x 4.5x 4.6x 15.0x 4.0x 4.3x 4.1x 3.5x 4.0x 3.7x 3.6x 10.0x 3.0x 3.4x 3.5x 3.5x 3.4x 3.3x 3.3x 3.1x 3.1x 3.0x 3.1x 3.0x 2.5x 2.9x 2.9x 2.9x 5.0x 2.6x 2.6x 2.6x 2.0x
1.5x 0.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% (10.0%)
(20.0%) LTM Rev Growth to EV / Rev Multiple / EV Growth Rev Rev LTM to (30.0%) 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA Company YTD Price Enterprise Revenue EBITDA EBITDA 2019 2018 12/31/2019 12/31/2019 Wolters Kluwer 25.9% $22,070 $5,057 $1,383 27.3% 5.4% (6.1%) 4.4x 16.0x SS&C Technologies Holdings 36.1% 23,395 4,540 1,680 37.0% 65.2% 64.1% 5.2x 13.9x Informa 36.0% 18,207 3,584 1,130 31.5% 56.8% (0.1%) 5.1x 16.1x SimCorp 70.0% 4,551 497 169 34.0% 24.0% 3.6% 9.2x 27.0x Envestnet 41.6% 4,251 870 90 10.3% 10.8% 14.8% 4.9x 47.4x IRESS 17.3% 1,761 334 82 24.4% 6.5% (1.4%) 5.3x 21.6x First Derivatives 29.2% 1,088 278 38 13.7% 12.1% 40.3% 3.9x 28.4x Linedata Services (15.2%) 301 198 41 20.4% 1.2% (6.5%) 1.5x 7.4x Brady (72.6%) 25 28 (2) NM 0.3% (2.9%) 0.9x NM NexJ Systems (32.5%) 11 14 (5) NM (16.3%) (20.6%) 0.8x NM Mean $7,566 $1,540 $461 29.9% 16.6% 8.5% 4.1x 22.2x Median $3,006 $416 $86 20.6% 8.7% (0.7%) 4.6x 18.8x
Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 14 Capital Markets Technology: Select Transactions
Q4 2019 Transactions Transaction Date Acquirer(s) Target Type EV / Revenue Value ($M)
12/17/19 YieldStreet WealthFlex M&A NA NA
11/25/19 Euromoney Wealth-X M&A $20 1.6x
11/12/19 Citigroup Trumid Raise NA NA
11/3/19 Morningstar AdviserLogic M&A NA NA
10/10/19 Broadridge Fi360 M&A $120 NA
10/9/19 KnowledgeVision OpenExchange M&A NA NA
Blackrock, CapitalG, Goldman Sachs, 10/3/19 Unqork Raise $80 NA and others
10/1/19 Broadridge Shadow Financial Systems M&A $39 NA
Notable Transaction 10/10/19: Broadridge acquires Fi360 for $120M1
Fi360 provides software, data, and analytics for financial intermediaries across the wealth and retirement industries.
• This acquisition expands Broadridge’s software offerings in the retirement space and will complement its existing Matrix trust and trading platform • The current shift to fee-based advice and increased regulatory scrutiny on the industry has demanded increased transparency and responsible practices from fiduciaries; Fi360 will position Broadridge to better serve their clients as their needs evolve
¹Broadridge Press Release, https://www.broadridge.com/press-release/2019/broadridge-to-acquire-fi360 Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 15 Insurance Technology: Public Company Statistics
25.8x 6.0x 24.8x 5.5x 25.0x 21.2x 20.4x 20.5x 5.0x 19.5x 20.2x 18.7x 18.7x 19.1x 17.6x 20.0x 4.5x 17.1x 16.9x 17.2x 16.5x 15.4x 15.5x 4.0x 14.6x 14.8x 15.3x 15.1x 14.7x 12.8x 15.0x 3.5x 11.2x 3.0x 3.4x 3.4x 10.0x 3.1x 2.5x 2.9x 2.9x 2.9x 2.8x 2.8x 2.7x 2.8x 2.8x 2.7x 2.7x 2.6x 2.6x 2.7x 2.6x 2.6x 2.0x 2.4x 2.4x 2.5x 2.5x 2.5x 2.4x 5.0x 1.5x
1.0x 0.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
LTM Rev Growth to EV / Rev Multiple / EV Growth Rev Rev LTM to (5.0%) (10.0%) 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA Company YTD Price Enterprise Revenue EBITDA EBITDA 2019 2018 12/31/2019 12/31/2019 Verisk Analytics 37.0% $27,102 $2,544 $1,068 42.0% 8.2% 9.6% 10.7x 25.4x Guidewire Software 36.8% 8,476 696 14 2.1% (4.0%) 42.4% 12.2x NM CoreLogic 30.8% 5,252 1,740 357 20.5% (5.4%) (0.6%) 3.0x 14.7x LiveRamp 24.4% 2,499 331 (185) NM 34.2% 7.2% 7.6x NM Ebix (21.5%) 1,711 571 159 27.8% 22.4% 28.1% 3.0x 10.8x Sapiens International 108.5% 1,203 312 48 15.4% 8.4% 7.0% 3.9x 25.0x Crawford & Company 12.8% 839 1,022 100 9.8% (7.6%) 0.0% 0.8x 8.4x Fineos (1.9%) 509 71 2 2.2% 16.8% – 7.1x NM Majesco 16.4% 325 143 13 9.1% 7.4% 8.7% 2.3x 24.9x msg life 7.9% 80 154 7 4.5% 17.3% – 0.5x 11.6x Mean $4,800 $758 $158 20.9% 9.8% 10.2% 5.1x 17.2x Median $1,457 $451 $31 6.9% 8.3% 7.1% 3.4x 14.7x
Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 16 Insurance Technology: Select Transactions
Q4 2019 Transactions Transaction Date Acquirer(s) Target Type EV / Revenue Value ($M)
12/4/19 Applied Systems Indio M&A NA NA
12/4/19 Verisk Analytics FAST M&A $194 NA
11/20/19 Volaris Kaboodle M&A NA NA
11/20/19 Hippo Sheltr M&A NA NA
11/20/19 Aon Coverwallet M&A NA NA
11/20/19 Y Combinator Continuity Vouch Insurance Raise $45 NA
King River Capital, Belfar Family, 11/7/19 Cover Genius Raise $10 NA Regal Funds Management, and others
10/15/19 Applied Systems Policy Works M&A NA NA
Notable Transaction 12/4/19: Verisk Analytics acquires FAST for $193.5M1
FAST provides a life insurance / annuity policy administration system which helps insurers accelerate underwriting.
• This acquisition enhances Verisk’s offerings in the life insurance space and improves their ability to offer an end-to-end workflow solution for life insurers • As the insurance space is being increasingly pressured to modernize, FAST will better enable Verisk to offer an out-of-the-box SaaS suite to help accelerate this transition
¹Verisk Analytics Press Release, https://www.verisk.com/press-releases/2019/december/verisk-to-acquire-fast-to-strengthen-its-data-and-analytics-solutions-in-life-insurance-and- annuities-market/ Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 17 Banking Technology: Public Company Statistics
28.6x 8.0x 27.4x 30.0x 24.4x 7.0x 22.9x 25.0x 21.6x 21.4x 21.5x 21.0x 20.0x 18.8x 7.0x 6.0x 17.1x 6.6x 20.0x 16.0x 15.7x 15.4x 15.5x 15.4x 6.1x 13.8x 13.8x 14.4x 14.0x 14.6x 14.3x 13.5x 12.8x 5.0x 5.6x 5.5x 15.0x 5.2x 4.9x 4.0x 4.7x 10.0x 4.4x 4.3x 4.3x 4.0x 3.7x 3.7x 3.7x 3.7x 3.0x 3.5x 3.6x 5.0x 3.2x 3.3x 3.3x 3.3x 3.2x 3.0x
2.0x 0.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
(5.0%) LTM Rev Growth to EV / Rev Multiple / EV Growth Rev Rev LTM to (10.0%) 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA Company YTD Price Enterprise Revenue EBITDA EBITDA 2019 2018 12/31/2019 12/31/2019 FIS 35.6% $104,944 $9,158 $2,830 30.9% 8.7% (2.7%) 11.5x 37.1x Fiserv 57.3% 101,985 7,693 2,540 33.0% 32.9% 1.6% 13.3x 40.2x Wolters Kluwer 25.9% 22,070 5,057 1,383 27.3% 5.4% (6.1%) 4.4x 16.0x Temenos 29.9% 12,399 922 287 31.1% 12.6% 9.6% 13.4x 43.3x Black Knight 43.1% 11,199 1,163 379 32.6% 6.1% 4.2% 9.6x 29.6x Jack Henry & Associates 15.1% 11,185 1,598 444 27.8% 6.4% 11.4% 7.0x 25.2x NICE 32.0% 9,782 1,555 400 25.7% 9.0% 7.0% 6.3x 24.4x Pegasystems 66.5% 6,279 891 (74) NM 0.2% 0.2% 7.0x NM Q2 63.6% 3,725 296 (31) NM 31.1% 16.3% 12.6x NM Computer Services 79.8% 1,171 274 – – 7.1% 8.8% 4.3x NM Intellect Design Arena (39.5%) 218 204 10 5.1% 14.5% 22.9% 1.1x 20.9x Crealogix (1.8%) 148 104 1 1.1% 16.9% 12.3% 1.4x NM Mean $23,759 $2,410 $681 28.3% 12.6% 7.1% 7.7x 29.6x Median $10,483 $1,042 $333 31.9% 8.9% 7.9% 7.0x 27.4x
Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 18 Banking Technology: Select Transactions
Q4 2019 Transactions Transaction Date Acquirer(s) Target Type EV / Revenue Value ($M)
11/27/19 GV Plaid Raise NA NA
11/19/19 Luminate Capital Partners Quantivate Raise NA NA
Warburg Pincus, Bessemer Venture 11/19/19 Perfios Raise $50 NA Partners, and others
11/8/19 ATB Financial Grow Technologies M&A NA NA
10/28/19 Corsair Capital IDnow Raise $40 NA
10/8/19 Thoma Bravo International Decision Systems M&A NA NA
T. Rowe Price, Salesforce Ventures, 10/2/19 nCino Raise $80 NA and others
10/1/19 Q2 Holdings PrecisionLender M&A $510 NA
Notable Transaction 10/1/19: Q2 Holdings acquires PrecisionLender for $510M1
PrecisionLender provides data-driven sales enablement, pricing, and portfolio management SaaS solutions for financial institutions.
• The acquisition extends Q2 offerings in the corporate banking space while solidifying the Company’s position as a market-leading provider of digital transformation for financial institutions within this segment • The company’s 150 banking clients will allow Q2 to leverage PrecisionLender’s extensive pricing and profitability data on millions of customer relationships and an excess of $1.7 trillion worth transactions a year to better serve its customers and remain at the forefront of innovation
1Q2 Holdings Press Release, https://www.q2ebanking.com/news/q2-precisionlender/ Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 19 Payments: Public Company Statistics
10.0x 30.0x 25.5x 9.0x 23.7x 22.1x 25.0x 20.5x 8.0x 19.5x 18.3x 18.7x 18.8x 18.1x 18.1x 17.0x 17.4x 17.1x 17.0x 8.1x 20.0x 7.0x 15.9x 16.2x 16.4x 16.1x 14.9x 15.5x 15.6x 15.1x 7.6x 14.7x 14.5x 7.2x 6.0x 7.0x 7.0x 15.0x 6.1x 6.0x 6.1x 5.0x 5.7x 5.6x 10.0x 5.0x 5.0x 4.0x 5.0x 4.7x 4.8x 4.8x 4.9x 4.5x 4.5x 4.4x 4.5x 4.6x 4.2x 4.1x 5.0x 3.0x
2.0x 0.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
50.0%
40.0%
30.0%
20.0%
10.0%
0.0% LTM Rev Growth to EV / Rev Multiple / EV Growth Rev Rev LTM to (10.0%) 0.0x 3.0x 6.0x 9.0x 12.0x 15.0x 18.0x 21.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA Company YTD Price Enterprise Revenue EBITDA EBITDA 2019 2018 12/31/2019 12/31/2019 Visa 42.4% $415,002 $22,977 $15,737 68.5% 11.5% 1.6% 18.1x 26.4x Mastercard 58.3% 303,704 16,276 9,703 59.6% 12.6% 1.5% 18.7x 31.3x PayPal 28.6% 122,027 17,037 3,235 19.0% 13.8% 15.6% 7.2x 37.7x Fidelity National Information Services 35.6% 104,944 9,158 2,830 30.9% 8.7% 10.8% 11.5x 37.1x Fiserv 57.3% 101,985 7,693 2,540 33.0% 32.9% 6.8% 13.3x 40.2x Global Payments 77.0% 63,046 3,805 1,570 41.3% 7.5% 17.3% 16.6x 40.2x FleetCor Technologies 54.9% 28,478 2,593 1,451 55.9% 8.1% 0.7% 11.0x 19.6x Square 11.5% 26,776 4,333 80 1.8% 45.3% 217.6% 6.2x NM Adyen 53.9% 23,075 2,390 262 11.0% 65.7% 2.6% 9.7x 88.0x Edenred 43.6% 14,674 1,633 596 36.5% 12.4% 5.7% 9.0x 24.6x Wirecard (19.1%) 12,679 2,817 809 28.7% 33.6% (9.2%) 4.5x 15.7x WEX 49.6% 11,671 1,665 576 34.6% 15.6% 8.9% 7.0x 20.3x StoneCo 116.3% 11,594 246 0 0.1% 71.5% 6.0% 47.2x NM Euronet Worldwide 53.9% 8,227 2,706 556 20.5% 8.6% 11.0% 3.0x 14.8x Bottomline Technologies 11.7% 2,402 428 38 8.9% 5.5% 31.1% 5.6x 63.1x EVO Payments 7.1% 2,129 507 122 24.0% (8.2%) 6.4% 4.2x 17.5x Cass Information Systems 9.1% 621 162 54 33.3% 9.4% 5.0% 3.8x 11.5x i3 Verticals 17.2% 610 376 25 6.6% 16.3% 34.0% 1.6x 24.4x Mean $69,647 $5,378 $2,232 41.5% 20.6% 20.7% 11.0x 32.0x Median $18,874 $2,650 $586 22.1% 12.5% 6.6% 8.1x 25.5x Note: Adyen and StoneCo do not appear on graph because their metrics were out of range Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 20 Payments: Select Transactions
Q4 2019 Transactions Transaction Date Acquirer(s) Target Type EV / Revenue Value ($M)
12/13/19 Great Hill Partners VersaPay M&A $104 NA
12/10/19 Payoneer optile M&A NA NA
11/19/19 NCR Corporation POS Solutions M&A NA NA
11/18/19 Elavon Sage Pay M&A $301 NA
11/5/19 Wirecard Allscore Payment Services M&A $61 NA
General Atlantic, Fidelity, Winslow 11/5/19 Riskified Raise $165 NA Capital, and others
11/4/19 Banco Santander Ebury M&A $463 NA
Oak HC/FT, Tiger Global, Coatue, 10/1/19 Rapyd Raise $100 NA General Catalyst, and others
Notable Transaction 08/28/2019: Banco Santander acquires a 50.1% stake in Ebury for $463M1
Ebury is a UK-based trade and foreign exchange facilitator and payments platform enabling small and medium- scale businesses to trade internationally.
• Santander views small and medium-sized businesses as a major growth driver contributing up to 60% of total employment and 40% of national GDP in emerging economies • This partnership provides Ebury with the infrastructure to access global markets and allow them to streamline and accelerate the process of bringing products and services to these markets • This will allow Santander to better service their SME client base and provide a higher quality of service through technology
¹Banco Santander Press Release, https://www.santander.com/en/press-room/press-releases/santander-invests-%C2%A3350-million-in-ebury-a-best-in-class-trade-and-fx-facilitator- for-smes-to-strengthen-its-global-trade-services-offer Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 21 Data & Analytics: Public Company Statistics
8.0x 31.0x 7.3x 7.2x
7.0x 6.4x 26.0x 6.1x 5.8x 5.9x 25.4x 6.0x 5.4x 5.0x 5.0x 5.0x 5.0x 5.0x 21.0x 4.8x 4.9x 22.6x 22.0x 5.0x 4.5x 4.6x 4.1x 4.2x 4.2x 4.2x 4.2x 19.8x 3.9x 4.0x 3.9x 18.4x 18.4x 16.0x 17.3x 4.0x 16.8x 16.5x 15.6x 15.7x 15.5x 16.1x 15.7x 15.5x 14.2x 14.0x 14.1x 13.1x 13.0x 13.6x 11.0x 3.0x 12.1x 12.5x 12.8x
2.0x 6.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
(5.0%) LTM Rev Growth to EV / Rev Multiple / EV Growth Rev Rev LTM to (10.0%) 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA Company YTD Price Enterprise Revenue EBITDA EBITDA 2019 2018 12/31/2019 12/31/2019 S&P Global 60.7% $71,210 $6,501 $3,256 50.1% 3.0% 4.1% 11.0x 21.9x Moody's 69.5% 49,591 4,656 2,173 46.7% 2.4% 8.2% 10.7x 22.8x Thomson Reuters 40.9% 38,222 5,850 1,029 17.6% 8.6% 0.9% 6.5x 37.1x Experian 34.0% 35,241 4,992 1,550 31.0% 5.3% 11.2% 7.1x 22.7x Willis Towers Watson 33.0% 32,240 8,721 1,901 21.8% 6.1% 0.2% 3.7x 17.0x Verisk Analytics 37.0% 27,102 2,544 1,068 42.0% 8.2% 9.6% 10.7x 25.4x MSCI 75.1% 23,751 1,513 792 52.3% 7.5% 10.4% 15.7x 30.0x Equifax 50.5% 20,151 3,437 720 20.9% 0.6% 1.6% 5.9x 28.0x Fair Isaac 100.4% 11,576 1,160 283 24.4% 16.0% 10.8% 10.0x 40.9x FactSet Research Systems 34.1% 10,659 1,450 511 35.3% 5.7% 12.4% 7.3x 20.8x Morningstar 37.8% 6,836 1,109 266 24.0% 10.9% (0.6%) 6.2x 25.7x CoreLogic 30.8% 5,252 1,740 357 20.5% (5.4%) 9.7% 3.0x 14.7x LiveRamp 24.4% 2,499 331 (185) NM 34.2% 7.2% 7.6x NM Value Line 11.1% 262 38 7 19.1% 5.4% 4.1% 6.9x 36.2x Mean $23,899 $3,146 $981 31.2% 7.8% 6.4% 8.0x 26.4x Median $21,951 $2,142 $756 35.3% 5.9% 7.7% 7.2x 25.4x
Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 22 Data & Analytics: Select Transactions
Q4 2019 Transactions Transaction Date Acquirer(s) Target Type EV / Revenue TransactionValue ($M) Date Acquirer Target Type EV / Revenue Value ($M) 12/3/19 Zywave miEdge M&A NA NA
Hudson Structured Capital 11/19/19 Battery Ventures, H.I.G. Capital, Cybercube Analytics Raise $35 NA 06/25/19 Management, ForgePoint Capital MX Technologies Raise $100 NA Point72 Ventures
Palm Drive Capital, Altos Ventures, MK 11/14/19 DataCubes Raise $15 NA Capital, Seyen Capital, and others
11/13/19 Vistara Capital Partners Kore.ai Raise NA NA 06/20/19 Guidepost Growth Equity ActiveViam M&A NA NA
11/7/19 MayStreet MIDAS arm of Thesys M&A NA NA
10/28/19 GP Bullhound Ravenpack Raise $10 NA Real Ventures, National Bank of 06/12/19 MindBridge Analytics M&A $30 NA Canada, PeakSpan Capital Route 66 Ventures, Transmerica 10/16/19 Quantemplate Raise $12 NA Ventures, and others
10/2/19 Verisk Analytics BuildFax M&A NA NA
Notable Transaction 12/3/19: Zywave acquires miEdge1 miEdge is a premier data business providing lead generation, prospecting, and analytics solutions to the U.S. insurance industry.
• This acquisition expands Zywave’s capabilities in the data and analytics space and augments its existing portfolio of applications by infusing them with miEdge’s powerful data • Zywave will have the ability to cross-sell its services to miEdge’s top-tier customer base of more than 2,000 clients including 80 of the top 100 U.S insurance brokerages, insurance carriers, payroll providers, and insurtech and benefits technology firms. • Morgan Partners advised miEdge on this transaction
1Zywave Press Release, https://www.zywave.com/zywave-acquires-miedge-becomes-leading-data-provider-in-the-industry/ Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 23 Service Providers: Public Company Statistics
3.5x 15.0x 16.0x 14.4x 14.0x 14.1x 13.6x 13.9x 13.7x 13.7x 13.1x 14.0x 12.7x 3.0x 12.3x 12.4x 12.4x 12.1x 12.0x 12.1x 11.5x 11.7x 11.3x 11.1x 11.3x 12.0x 10.6x 10.3x 10.2x 2.5x 2.6x 2.4x 10.0x 2.4x 2.4x 2.4x 2.4x 2.4x 2.3x 2.3x 2.3x 2.3x 2.3x 2.3x 2.3x 2.3x 2.2x 2.0x 2.1x 2.2x 2.1x 2.1x 2.1x 2.1x 2.1x 8.0x 1.9x
1.5x 6.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
(5.0%) LTM Rev Growth to EV / Rev Multiple / EV Growth Rev Rev LTM to (10.0%) 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA Company YTD Price Enterprise Revenue EBITDA EBITDA 2019 2018 12/31/2019 12/31/2019 IBM 17.9% $179,517 $77,131 $16,664 21.6% (4.0%) 1.6% 2.3x 10.8x Accenture 49.3% 131,713 43,968 7,069 16.1% 5.4% 1.5% 3.0x 18.6x Tata Consultancy Services 13.6% 107,036 21,584 5,722 26.5% 13.7% 15.6% 5.0x 18.7x Infosys 9.9% 41,374 12,386 2,981 24.1% 9.5% 10.8% 3.3x 13.9x Cognizant Technology Solutions (2.3%) 32,583 16,628 3,169 19.1% 5.1% 6.8% 2.0x 10.3x CGI 30.1% 24,114 9,149 1,584 17.3% 5.3% 17.3% 2.6x 15.2x Capgemini 25.5% 23,464 15,632 2,019 12.9% 8.1% 0.7% 1.5x 11.6x HCL Technologies 18.4% 22,018 9,328 2,091 22.4% 14.1% 217.6% 2.4x 10.5x DXC Technology Company (29.3%) 17,860 20,199 3,711 18.4% (5.3%) 2.6% 0.9x 4.8x Wipro 0.1% 16,621 8,479 1,786 21.1% 7.1% 5.7% 2.0x 9.3x Broadridge Financial Solutions 28.4% 15,818 4,338 893 20.6% (0.9%) (9.2%) 3.6x 17.7x Genpact 56.2% 9,140 3,415 545 16.0% 17.8% 8.9% 2.7x 16.8x Computershare (2.4%) 7,828 2,346 615 26.2% 2.5% 6.0% 3.3x 12.7x WNS 60.3% 3,376 851 161 19.0% 7.7% 11.0% 4.0x 20.9x ExlService 32.0% 2,433 969 130 13.4% 14.6% 6.4% 2.5x 18.7x Mphasis (8.3%) 2,349 1,163 191 16.4% 15.1% 31.1% 2.0x 12.3x Mindtree (7.3%) 1,831 1,044 134 12.8% 18.3% 5.0% 1.8x 13.7x Virtusa 6.4% 1,724 1,290 103 8.0% 12.1% 34.0% 1.3x 16.7x Crawford & Company 12.8% 839 1,022 100 9.8% (7.6%) 0.0% 0.8x 8.4x Mean $33,770 $13,206 $2,614 19.8% 7.3% 19.6% 2.5x 13.8x Median $16,621 $8,479 $1,584 18.7% 7.7% 6.4% 2.4x 13.7x
Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 24 Service Providers: Select Transactions
Q4 2019 Transactions Transaction Date Acquirer(s) Target Type EV / Revenue Value ($M)
11/29/19 Capitala Finance Corp. Vology Raise NA NA
11/19/19 Coretelligent SoundView IT Solutions M&A NA NA
10/29/19 Bravura Solutions FinoComp M&A $17 NA
10/22/19 Retelit Digital Services S.p.A. Partners Associates S.p.A M&A $81 NA
10/15/19 RIA in a Box Gordian Group M&A NA NA
10/1/19 Atos Idnomic M&A NA NA
Notable Transaction 11/19/19: Coretelligent and VSS acquire SoundView IT Solutions1
SoundView IT Solutions is a full-service IT integration company primarily serving hedge funds, family offices, and corporations within the metropolitan NY and tri-state area.
• This acquisition bolsters Coretelligent’s market-leading expertise within the financial services space • SoundView brings a prestigious customer base to Coretelligent that will be better served with the combined resources of the merged company • Morgan Partners advised Coretelligent on this acquisition
1Coretelligent Press Release, https://coretelligent.com/news/coretelligent-and-vss-acquire-soundview-it-solutions/ Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 25 Tech-led Financial Institutions
5.5x 20.0x 16.9x 16.4x 16.3x 16.5x 18.0x 15.2x 15.7x 14.6x 14.6x 15.1x 14.6x 14.6x 15.0x 13.9x 13.6x 16.0x 4.5x 12.8x 13.2x 12.2x 12.6x 12.4x 12.6x 12.6x 12.1x 11.6x 11.9x 4.6x 4.6x 14.0x 12.0x 4.1x 4.2x 4.0x 3.5x 3.9x 3.9x 10.0x 3.7x 3.8x 3.6x 3.5x 3.6x 3.5x 8.0x 3.3x 3.4x 3.4x 6.0x 2.5x 2.8x 2.9x 2.9x 2.7x 2.6x 2.6x 2.7x 2.6x 4.0x 2.0x
1.5x 0.0x LTM Rev & EBT EBT & MultiplesRev LTM
Market Capitalization / LTM Revenue Market Capitalization / LTM EBT Ex. Unusual Items
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
(5.0%) LTM Rev Growth to MKT / Rev Rev MKTGrowth Multiple/ Rev LTM to (10.0%) 0.0x 3.0x 6.0x 9.0x 12.0x 15.0x 18.0x 21.0x 24.0x 27.0x 30.0x
($M) LTM Performance Revenue Growth Mkt Cap / Rev Mkt Cap / EBT Company YTD Price Market Revenue EBT EBT 2019 2018 12/31/2019 12/31/2019 CME Group 6.7% $71,931 $4,959 $2,798 56.4% 24.8% 18.2% 14.5x 25.7x The Charles Schwab 14.5% 61,095 10,784 4,946 45.9% 11.1% 17.6% 5.7x 12.4x Intercontinental Exchange 22.9% 51,536 5,212 2,571 49.3% 8.3% 20.8% 9.9x 20.0x Hong Kong Exchanges and Clearing 11.7% 40,865 2,054 1,379 67.1% 2.5% 7.2% 19.9x 29.6x London Stock Exchange 90.8% 35,839 3,840 971 25.3% 11.1% 48.5% 9.3x 36.9x Deutsche Börse 33.5% 28,829 3,296 1,704 51.7% 7.2% 4.4% 8.7x 16.9x TD Ameritrade 1.5% 26,866 5,872 2,875 49.0% 9.7% 6.5% 4.6x 9.3x Nasdaq 31.3% 17,555 4,333 1,039 24.0% 4.2% 8.3% 4.1x 16.9x Cboe Global Markets 22.7% 13,293 2,645 615 23.2% 0.1% 10.7% 5.0x 21.6x MarketAxess 79.4% 14,377 494 253 51.2% 17.2% 16.8% 29.1x 56.8x E*TRADE Financial 3.4% 10,160 2,986 1,442 48.3% 3.9% 24.2% 3.4x 7.0x Euronext 44.4% 5,676 709 376 53.0% 8.9% 10.2% 8.0x 15.1x TMX Group 59.0% 4,873 840 268 31.9% 17.8% 19.7% 5.8x 18.2x TP ICAP 35.8% 3,025 2,202 272 12.3% 1.6% 70.0% 1.4x 11.1x BGC Partners 14.9% 2,071 2,026 104 5.2% 179.1% 13.1% 1.0x 19.8x Virtu Financial (37.9%) 1,883 1,293 198 15.3% 3.3% (5.4%) 1.5x 9.5x LendingClub (4.0%) 1,112 749 (42) NM (1.5%) 2.7% 1.5x NM Compagnie Financière Tradition 6.4% 778 913 73 8.0% 5.6% 3.3% 0.9x 10.7x Monex Group (27.6%) 631 463 38 8.2% (6.1%) 23.6% 1.4x 16.7x On Deck Capital (29.8%) 281 239 37 15.6% 4.8% 33.5% 1.2x 7.6x GAIN Capital (35.9%) 148 241 (36) NM (26.4%) 28.5% 0.6x NM Mean $18,706 $2,674 $1,042 39.0% 13.7% 18.2% 6.5x 19.0x Median $10,160 $2,054 $376 18.3% 5.6% 16.8% 4.6x 16.9x
Note: BGC Partners and GAIN Capital Holdings, Inc. do not appear on graph because their metrics were out of range Source: S&P Capital IQ Quarterly Financial Technology Executive Briefing 26 MORGAN PARTNERS LLC MEMBER, FINRA/SIPC 100 WORCESTER STREET, SUITE 202 WELLESLEY, MA 02481 +1 (617) 410-5200 WWW.MORGANPARTNERS.COM
Morgan Partners is an investment bank working exclusively in the FinTech sector. With a focus on the middle market, we help our clients complete buy- and sell-side transactions in the $50 - $250M enterprise value range
Please contact us to discuss your needs
MARC MASELLI HUGH KEEFE PATRICK VAUGHN Founder & Managing Director Director Managing Director [email protected] [email protected] [email protected] +1 (617) 440-3495 +1 (617) 863 2126 +1 (617) 440-3496
Quarterly Financial Technology Executive Briefing 27