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Bi-Weekly Finanial Technology Sector Report

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Bi-Weekly Finanial Technology Sector Report Financial Technology Sector Summary November 30, 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 48 Dover Street 11-1 Marunouchi 1-chome One Maritime Plaza, 25th Fl. 640 Fifth Avenue, 10 Fl. London W1S 4FF Chiyoda-ku, Tokyo 100-6230 San Francisco, CA 94111 New York, NY 10019 United Kingdom Japan (415) 318-3600 (212) 999-7090 +44 (0) 207 038-3200 +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 130 165 Last 12 Months Last 3 Years 155 120 145 110 135 100 125 115 90 105 80 95 70 85 60 75 11/30/15 1/13/16 2/26/16 4/12/16 5/26/16 7/11/16 8/24/16 10/7/16 11/22/16 11/28/13 3/18/14 7/4/14 10/22/14 2/9/15 5/28/15 9/15/15 1/1/16 4/20/16 8/8/16 11/24/16 (1) (2) Indexed Price Performance Payments Exchanges Sector 3 Months 1 Year 3 Years (3) (4) Online Broker Dealers 25.6% 13.2% 54.8% Financial Data, Content, Information Processors / Payments 3.6% 4.7% 27.5% & Analytics Credit Bureaus Banking & Lending Technology 2.6% 11.9% 49.0% Exchanges (0.2%) 6.1% 24.6% (6) (5) Banking & Lending Online Broker Dealers Healthcare / Insurance Technology (0.9%) 4.1% 20.8% Technology Investment Services, Software, & Technology (1.4%) (2.9%) 29.6% Financial, Data, Content, & Analytics (2.9%) 8.9% 32.7% (7) (8) Information Processors / Credit Bureaus (7.5%) 5.4% 23.4% 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 17.8x Exchanges 55.6% Information Processors / Credit Bureaus 15.2x Online Broker Dealers 41.4% Investment Services, Software, & 14.1x Financial Data, Content, & Analytics 39.9% Technology Payments 13.6x Banking and Lending Technology 31.4% Investment Services, Software, & Financial Data, Content, & Analytics 13.2x 30.4% Technology Banking and Lending Technology 12.6x Payments 25.6% Exchanges 12.5x Information Processors / Credit Bureaus 23.3% Online Broker Dealers 11.3x Healthcare / Insurance Technology 19.8% 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 29.6x Healthcare / Insurance Technology 2.1 12.8% Online Broker Dealers 24.6x Financial Data, Content, & Analytics 2.1 11.8% Investment Services, Software, & 24.1x Banking and Lending Technology 2.0 15.0% Technology Information Processors / Credit Bureaus 23.1x Information Processors / Credit Bureaus 1.9 13.5% Investment Services, Software, & Healthcare / Insurance Technology 22.6x 1.8 15.8% Technology Financial Data, Content, & Analytics 22.1x Exchanges 1.8 10.1% Exchanges 20.8x Online Broker Dealers 1.5 17.5% Payments 18.9x Payments 1.5 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. $191,831 5% 28.0x Blackhawk Network Holdings, Inc. $1,969 (20%) 22.8x Mastercard Incorporated $113,996 6% 27.9x Green Dot Corporation $1,217 44% 16.5x American Express Company $64,526 (2%) 11.8x Net 1 Ueps Technologies Inc. $561 (32%) 5.9x PayPal Holdings, Inc. $48,362 13% 26.8x Sector Average $1,249 (3%) 15.1x Discover Financial Services $25,466 15% 11.3x Sector Average $88,836 7% 21.2x LTM Price ATM / Kiosks Market Cap. Performance P/E 2016 LTM Price Cardtronics plc $2,322 48% 15.8x Merchant Processing Market Cap. Performance P/E 2016 Everi Holdings Inc. $160 (38%) 3.5x Cielo S.A. $19,321 5% 16.5x TIO Networks Corp. $152 42% 25.0x First Data Corporation $13,300 (17%) 11.2x Sector Average $878 18% 14.8x Global Payments Inc. $10,680 1% 22.1x Vantiv, Inc. $9,072 15% 21.6x LTM Price Total System Services, Inc. $9,053 (7%) 17.5x POS Hardware / Technology Market Cap. Performance P/E 2016 Worldpay Group plc $6,732 (20%) 22.4x Wirecard AG $5,493 (10%) 21.9x Ingenico Group $4,864 (32%) 17.5x Square, Inc. $4,183 NA NM NCR Corporation $4,605 40% 12.4x GMO Payment Gateway, Inc. $1,560 13% 57.2x VeriFone Systems, Inc. $1,827 (43%) 10.7x EVERTEC, Inc. $1,164 (5%) 9.5x PAR Technology Corporation $86 (24%) NA CardConnect Corp. $288 NA NM Sector Average $2,846 (15%) 13.5x Planet Payment, Inc. $205 42% NA JetPay Corporation $47 (8%) NM LTM Price Sector Average $6,754 2% 22.2x Banking and Lending Technology Market Cap. Performance P/E 2016 Intuit Inc. $28,729 14% 28.7x LTM Price Fidelity National Information Services, Inc $25,051 15% 19.9x Money Transfer Market Cap. Performance P/E 2016 Fiserv, Inc. $21,823 5% 22.6x The Western Union Company $9,901 9% 12.3x Jack Henry & Associates Inc. $6,606 9% 27.7x Euronet Worldwide, Inc. $3,925 (4%) 18.4x Temenos Group AG $4,112 31% 30.3x Moneygram International Inc. $513 5% 11.8x Ellie Mae, Inc. $3,120 47% 42.4x Sector Average $4,780 3% 14.2x Black Knight Financial Services, Inc. $2,501 3% 31.6x LendingClub Corporation $2,421 (54%) NM LTM Price ACI Worldwide, Inc. $2,187 (22%) 40.9x Closed Loop Market Cap. Performance P/E 2016 Q2 Holdings, Inc. $1,288 21% NM DH Corporation $1,164 (56%) 7.2x FleetCor Technologies, Inc. $13,334 (5%) 20.9x Bottomline Technologies (de), Inc. $888 (14%) 23.5x Alliance Data Systems Corporation $12,229 (27%) 12.5x On Deck Capital, Inc. $397 (49%) NM Edenred SA $4,687 10% 20.8x Performant Financial Corporation $191 84% 47.5x WEX Inc. $4,344 14% 22.3x Sector Average $7,177 3% 29.3x Sector Average $8,648 (2%) 19.1x LTM Price Information Processors / Credit Bureaus Market Cap. Performance P/E 2016 0 Experian plc $16,652 (3%) 19.5x Equifax Inc. $13,656 8% 20.8x Fair Isaac Corporation $3,528 32% 23.5x Acxiom Corporation $2,089 23% 41.0x Sector Average $8,981 15% 26.2x Notes: 9 Source: CapitalIQ and Wall Street Research. Market data as of November 25, 2016. MARKET SUMMARY LTM Price Performance and 2016 P/E – Securities / Cap. Mkts. / Data & Analytics ($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. $38,292 18% 25.9x SEI Investments Co. $7,230 (15%) 22.8x Intercontinental Exchange, Inc. $32,578 5% 20.0x Broadridge Financial Solutions, Inc.
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