QUARTERLY FINANCIAL TECHNOLOGY EXECUTIVE BRIEFING ANALYSIS THROUGH Q1 2021 APRIL 1, 2021 Table of Contents
Morgan Partners Overview – Leaders in FinTech M&A 3
Sub-Sector Comparison: Q1 2021
FinTech Sub-Sector Performance 6
Median Multiples by Sub-Sector 7
Variability by Sub-Sector 8
Sub-Sector Valuation Multiples Relative to Growth 9
Sub-Sector Aggregate Market Cap 10
Public & Private FinTech Transactions Spotlight 11
Sub-Sector Analysis
Capital Markets Technology 15
Insurance Technology 17
Banking Technology 19
Payments 21
Data & Analytics 23
Service Providers 25
Traditional Financial Institutions 27
Contact Information 30
This communication is provided for informational purposes only, is not a formal confirmation of any particular transaction, and should not be regarded as an offer to sell or solicitation to buy any financial instrument or service. Morgan Partners LLC accepts no liability whatsoever arising directly or indirectly from the use of this document and offers no warranty in relation to the accuracy or completeness off its contents. Unauthorized distribution without prior consent from Morgan Partners LLC is strictly prohibited.
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: o Strategic exits o Capital raises and recapitalizations o Buyouts o Acquisitions • The firm has an exceptional FinTech industry reputation and track record of successful deals with satisfied, referenceable clients
Selected FinTech Deal Experience
A PORTFOLIO COMPANY OF A SUBSIDIARY OF A PORTFOLIO COMPANY OF A PORTFOLIO COMPANY OF A PORTFOLIO A PORTFOLIO COMPANY OF HAS ACQUIRED COMPANY OF
HAS ACQUIRED HAS ACQUIRED HAS ACQUIRED HAS ACQUIRED HAS ACQUIRED HAS ACQUIRED
&
FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR TO THE BUYER TO THE BUYER TO THE SELLER TO THE SELLER TO THE BUYER TO THE SELLER TO THE BUYER January 2021 November 2020 September 2020 June 2020 February 2020 December 2019 November 2019
FV Holdings LLC
HAS MADE AN A PORTFOLIO HAS COMPLETED A STRATEGIC HAS ACQUIRED A PORTFOLIO COMPANY OF HAS MADE AN TRANSACTION WITH INVESTMENT IN HAS ACQUIRED COMPANY OF INVESTMENT IN HAS ACQUIRED HAS ACQUIRED FROM A PORFTFOLIO COMPANY OF FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR TO THE SELLER TO THE BUYER TO THE SELLER TO THE BUYER TO THE SELLER TO THE SELLER TO THE SELLER August 2019 July 2019 June 2019 January 2019 November 2018 November 2018 July 2018
A PORTFOLIO COMPANY OF HAS ACQUIRED HAS ACQUIRED HAS ACQUIRED Has MADE A MAJORITY HAS ACQUIRED HAS ACQUIRED EQUITY INVESTMENT IN HAS ACQUIRED FROM FROM £491 MILLION FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR FINANCIAL ADVISOR TO THE SELLER TO THE BUYER TO THE BUYER TO THE BUYER TO THE SELLER TO THE SELLER TO THE SELLER March 2018 August 2017 May 2017 May 2017 February 2017 December 2016 November 2015
Quarterly Financial Technology Executive Briefing 3 Morgan Partners Deal Announcement
Overview
A PORTFOLIO COMPANY OF ReSource Pro, a leading insurance-focused Business Process Outsourcing (BPO) firm backed by DFW Capital Partners (“DFW”), has acquired Strategy Meets Action (“SMA”) and The HAS ACQUIRED Nolan Company (“Nolan”). Headquartered in New York, & ReSource Pro provides comprehensive services to hundreds of agencies, brokers, MGAs, and carriers. The acquisitions of SMA and Nolan expands their ability to provide business FINANCIAL ADVISOR TO THE BUYER transformation services and operational solutions to the carrier January 2021 end market.
“The Morgan Partners Morgan Partners Approach & Results team has been an extremely valuable partner in helping us analyze the acquisition landscape and Morgan Partners was engaged to help ReSource Pro and DFW conduct our focused to find attractive acquisition targets across the insurance search for companies that technology and services landscape. Morgan Partners quickly will complement and build identified SMA and Nolan as firms with a strong reputation and on our capabilities.” blue-chip list of carrier customers that would nicely complement and expand on ReSource Pro’s existing customer base and Dan Epstein service offerings. Morgan Partners’ deep industry relationships CEO and expertise were integral throughout the deal process, and ReSource Pro helped deliver a great outcome for ReSource Pro’s shareholders.
The acquisition of SMA and Nolan reinforces ReSource Pro’s status as a market leading provider of BPO services exclusively to the insurance industry.
Quarterly Financial Technology Executive Briefing 4 Sub-Sector Comparison
Quarterly Financial Technology Executive Briefing 5 FinTech Sub-Sector Performance in 20211
40.0%
33.3% 30.0%
20.0%
15.4%
10.0% 8.1% 5.8%
(0.4%) 0.0% (0.5%) (4.8%)
(10.0%) (12.1%)
(20.0%)
(30.0%)
(40.0%)
S&P 500 Insurance Technology Service Providers Capital Markets Technology Banking Technology Payments Data & Analytics Traditional Financial Institutions
• While being the most negatively affected sub-sector at the start of the COVID-19 pandemic, Traditional Financial Institutions have rebounded nicely in Q1. Service Providers followed up on a strong Q4 to slightly outpace the S&P 500 • The rebound of these sectors, hard hit by the impact of COVID-19, could indicate the market’s belief in the continued roll-outs of vaccines and abatement of the pandemic • After a strong 2020, several FinTech sectors have had a down quarter to start 2021 – including traditionally highly-valued verticals like Payments and Data & Analytics • Banking Technology significantly outperformed other sub-sectors, while Insurance Technology, Capital Markets Technology, Payments, and Data & Analytics all contracted over the course of the quarter
These eight indices are maintained by Morgan Partners, and their constituents shown on pages 15, 17, 19, 21, 23, 25, and 28-29 1 Capital Markets Technology, Insurance Technology, Banking Technology, Payments, Data & Analytics, Service Providers, and Traditional 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 6 Sub-Sector Comparison (Median Multiples)
Data & Analytics 7.5x 1 Banking Technology 7.9x
Capital Markets Technology 4.5x
Insurance Technology 5.6x
Financial TechnologyFinancial Payments 8.5x
Service Providers 3.2x
Traditional Financial Institutions 2.7x Enterprise Value / LTM Revenue LTM / Value Enterprise S&P 500 4.0x
Data & Analytics 24.3x 1 Banking Technology 25.5x
Capital Markets Technology 19.2x
Insurance Technology 26.5x
Payments 25.3x Financial TechnologyFinancial
Service Providers 15.7x
Traditional Financial Institutions 13.9x Enterprise Value / LTM EBITDA LTM / Value Enterprise S&P 500 15.3x
• Aside from Service Providers and Traditional Financial Institutions, all other sub-sectors saw a reduction in the median EV/Revenue multiple • Payments saw the sharpest drop – from 9.6x at the end of Q4 2020 to 8.5x now. At the same time, the median multiple for the S&P 500 increased from 3.6x to 4.0x • Median EBITDA multiples also dipped for Data & Analytics, Capital Markets Technology, Insurance Technology, and Service Providers, while rising for the other indices 1Enterprise value, revenue and EBITDA are universe medians drawn from publicly traded companies as of 3/31/2021 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 Source: S&P Capital IQ Source: S&PCapital LTM latest months 12 briefing.denotes 2 1 Enterprise value, revenue and EBITDA are universe medians drawn from publicly traded companies as of of as companies traded from drawn publiclymedians EBITDA and are universe revenue value, Enterprise 25 by `represented Variability • • Enterprise Value / LTM EBITDA1 Enterprise Value / LTM Revenue1 Insurance Insurance Technology and Payments saw an increase in their 75 EBITDA multiple trends weremore far varied, but otherwise lagging sectors such as Institutions were exception, the along with S&P the 500 bounds revenue for multiples 2021. start to Service Providers and Traditional Financial of Most the tracked FinTech sub - Financial Technology Financial Technology Sector Variability (25 Traditional Financial Institutions Financial Traditional Traditional Financial Institutions Financial Traditional Capital Markets Technology Markets Capital Capital Markets Technology Capital th and 75th percentile multiples from from sub each multiples percentile and 75th Insurance Technology Insurance Insurance Technology Insurance Banking Technology Banking Banking Technology Banking Service Providers Service Service Providers Service Data & Analytics & Data Data & Analytics & Data Payments Payments S&P 500 S&P S&P 500 S&P - sectors sectors a sawslight decrease in lower and/or upper - sector 0.0x 0.0x th 1.9x 2.4x and 75 10.2x 10.4x 3.0x 1.2x 3.5x 13.7x 10.0x 15.2x 3.3x 1.6x 18.4x 5.8x 3.8x 5.0x 3/31/2021 21.4x th 6.4x 22.4x 6.6x 4.6x 23.5x 20.0x 5.1x 5.1x Quarterly Financial Technology Executive Briefing Quarterly ExecutiveFinancial Briefing Technology PercentileMultiples) , where the constituents of of sub , the each constituents where 20.1x 21.8x 7.0x 22.9x 30.0x 7.2x 10.0x th 29.9x 30.5x 4.9x 5.2x percentile percentile multiples 10.2x 33.7x 7.3x 40.0x 11.5x 11.6x 38.7x - sector this insector are those 42.0x 13.1x 15.0x 50.0x 1 8 Sub-Sector Valuation Multiples Relative to Growth
Insurance 1 20% Technology
15%
10% Banking Technology
5% Service Providers Capital Markets Traditional Financial Technology Data & Analytics Institutions 0% 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x -5% Payments
-10%
Median Rev GrowthRevLTM / Medianto EV Revenue -15% ` 1 20% Data & Analytics 15%
10% Insurance Traditional Financial Technology 5% Institutions Service Providers Banking Technology 0% 10.0x 12.0x 14.0x 16.0x 18.0x 20.0x 22.0x 24.0x 26.0x 28.0x Capital Markets -5% Technology
-10%
-15% Payments
-20% Median EBITDA EBITDA Median toGrowth EV EBITDALTM /
• Insurance Technology boasted the strongest revenue growth, and Data & Analytics had the strongest EBITDA growth of all tracked sub-sectors, as they did in Q4 2020 • Payments continued to earn the strongest median revenue multiples despite the lowest median growth, while Insurance Technology slightly edged 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 3/31/2021, 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 9 Sub-Sector Aggregate Market Cap
$65,360 $266,663 $66,207 $422,349
$709,744
$3,449,725
$1,578,890
Sector Aggregate Market Cap ($M)Cap Market Aggregate Sector -
Traditional Financial Institutions Payments Sub Service Providers Data & Analytics
Banking Technology Capital Markets Technology
Insurance Technology
Market Cap Market Cap Sub-Sector ($M) Growth % (1/1/2021) (3/31/2021) Traditional Financial Institutions 3,449,725 3,922,719 13.7% Payments 1,578,890 1,563,515 (1.0%) Service Providers 709,744 750,184 5.7% Data & Analytics 422,349 418,958 (0.8%) Banking Technology 266,663 260,969 (2.1%) Capital Markets Technology 65,360 63,734 (2.5%) Insurance Technology 66,207 57,624 (13.0%) Total 6,558,938 7,037,702 7.3%
• Most sub-sectors saw a decrease in aggregate market capitalization since the beginning of the year, but all sectors except for Insurance Technology have Market Caps higher than at the end of Q3 2020 • Traditional Financial Institutions and Service Providers, however, continued to expand their Market Cap this year, further showing these sectors to be the biggest beneficiaries of the vaccine rollouts and COVID-19 recovery efforts Quarterly Financial Technology Executive Briefing 10 Source: S&P Capital IQ Public & Private FinTech Transactions Spotlight
Quarterly Financial Technology Executive Briefing 11 Public FinTech M&A Activity
2021 YTD = 11
2019 - 2020 = 98
Number of Deals 2017 - 2018 = 100
2015 - 2016 = 75
2013 - 2014 = 54
0 1
1 1 0 6 7 2021 0 0 0 2 10 3 2019-2020 0 6 4 1 9 3 7 8 7 0 1 7 11 1 4 0 7 1 6 7 5 3 11 4 2017-2018 4 11 5 6 6 5 11 7 4 3 3 5 4 6 3 Number of Transactions of Number 7 2015-2016 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
2013-2014 2015-2016 2017-2018 2019 - 2020 2021
2021 YTD = $19,022
1,2,3 2019 - 2020 = $177,149 Total Deal Size 2017 - 2018 = $61,221 ($M) 2015 - 2016 = $141,702 $117,710 2013 - 2014 = $16,908
$72,487 $69,214 $59,430
$36,176
$25,045 $11,127 $19,022
$5,792
Annual Aggregated Deal Size Over Time Over Size Deal Aggregated Annual 2013 2014 2015 2016 2017 2018 2019 2020 2021
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 32020 deal size is largely driven by Willis Towers Watson’s $30B acquisition of Aon Source: S&P Capital IQ Quarterly Financial Technology Executive Briefing 12 Private Equity Spotlight
Private Equity Recent Relevant FinTech Latest Fund Group Transaction Investments Raised
Thoma Bravo Fund XIV $17.8B Acquisition March 2021
Equality Private Equity Partners I $116M Equity Investment January 2021
Spectrum Equity IX $1.5B Minority Investment January 2021
Serent Capital IV $750M Majority Investment January 2021
Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 13 Sub-Sector Analysis
Quarterly Financial Technology Executive Briefing 14 Capital Markets Technology: Public Company Statistics
6.0x 22.7x23.1x 25.0x 22.1x 22.0x 21.2x21.2x 20.6x 20.5x 20.9x 5.5x 19.8x 20.2x19.9x 20.3x 19.0x 19.0x 19.5x 19.2x 18.4x 18.2x 18.6x18.4x 20.0x 5.0x 17.1x 17.6x17.2x17.2x 4.5x 15.0x 4.7x 4.5x 4.5x 4.5x 4.5x 15.0x 4.0x 4.3x 4.4x 4.1x 3.5x 4.0x 3.7x 3.6x 10.0x 3.5x 3.5x 3.4x 3.4x 3.5x 3.0x 3.3x 3.3x 3.1x 3.1x 3.0x 3.1x 3.0x 2.9x 2.5x 2.9x 5.0x 2.6x 2.0x
1.5x 0.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA 45.0% “Rule of 40” is calculated as 40.0% the sum of revenue growth and EBITDA margin 35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
LTM “Rule of 40” to EV / Rev Rev 40” to Multiple/ EV of “RuleLTM 5.0%
0.0% 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA YTD Price Enterprise EBITDA Company Revenue EBITDA 2021 2020 2021 2021 Change Value Margin Wolters Kluwer 7.3% $25,488 $5,631 $1,648 29.3% (0.2%) 2.8% 4.5x 15.5x SS&C Technologies Holdings (4.0%) 24,587 4,668 1,704 36.5% 0.8% 2.8% 5.3x 14.4x Informa 2.0% 14,536 2,844 708 24.9% (18.5%) (0.0%) 5.1x 20.5x SimCorp (13.3%) 4,913 558 157 28.1% 0.3% (4.0%) 8.8x 31.3x Envestnet (12.2%) 4,406 998 133 13.3% 10.9% 12.0% 4.4x 33.1x IRESS (13.5%) 1,494 419 84 19.9% 6.6% 9.6% 3.6x 17.9x First Derivatives (17.0%) 1,094 322 37 11.6% 5.4% 7.3% 3.4x 29.4x Linedata Services 23.7% 369 197 48 24.3% (5.1%) (5.7%) 1.9x 7.7x Mean $9,611 $1,954 $565 28.9% 0.0% 3.1% 4.6x 21.2x Median $4,660 $778 $145 18.6% 0.5% 2.8% 4.5x 19.2x
Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 15 Capital Markets Technology: Select Transactions
Q1 2021 Transactions Transaction Date Target Acquirer(s) / Lead Investor(s) Type EV / Revenue Value ($M)
3/29/21 Itiviti Broadridge M&A $2,500M 10.0x
3/16/21 eToro FinTech Acquisition Corp. V M&A $10,400M 16.0x
StoneRidge Holdings, Morgan Stanley, 3/8/21 NYDIG Raise $200M NA New York Life, and Others
2/2/21 InsiderScore MackeyRMS M&A NA NA
2/2/21 InvestCloud Motive Partners and Clearlake Capital M&A $1,000M NA
1/21/21 tastytrade IG Group M&A 1,000M 8.6x
1/14/21 CreditSights Fitch Group M&A NA NA
1/12/21 Style Analytics Investment Metrics M&A NA NA
Notable Transaction
Motive Partners and Clearlake Capital Recapitalize InvestCloud for $1B1
InvestCloud is a market-leading provider of SaaS solutions to buy-side & financial institutions, primarily in wealth management. Its product offerings include a wealth platform, private banking platform, and a financial product marketplace. Recapitalize
• As part of the transaction, InvestCloud also acquired Tegra118 and Finatix, previously portfolio companies of Motive Partners h • As a result of the transaction, InvestCloud now has $4T in assets on their platform, with customers spanning the globe • The transaction and subsequent acquisitions firmly establishes InvestCloud as a market leader in the buy-side technology space $1.0 Billion • With the backing of Motive Partners and Clearlake Capital, InvestCloud can be aggressive in making future add-on acquisitions February 2, 2021
¹https://www.prnewswire.com/news-releases/investcloud-recapitalizes-at-1-billion-and-integrates-two-new-businesses-to-create-a-financial-technology-leader-with-a-saas-global- wealth-solutions-platform-having-over-4-trillion-in-assets-301219476.html Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 16 Insurance Technology: Public Company Statistics
8.0x 30.0x 26.5x 7.5x 25.8x 24.8x 1 23.8x23.8x 7.0x 25.0x 6.5x 21.2x 21.4x 20.4x 20.2x 20.5x 19.5x 6.0x 18.7x 18.7x 19.1x 17.2x 17.6x 20.0x 5.5x 17.1x 16.9x 16.5x 5.9x 5.9x 15.3x 15.1x15.4x15.5x 15.1x 5.6x 5.0x 14.8x 14.2x 4.5x 15.0x 4.0x 4.7x 3.5x 10.0x 3.0x 3.4x 3.3x 3.1x 2.5x 2.9x 2.9x 2.9x 2.8x 2.7x 2.8x 2.8x 2.7x 2.7x 2.6x 2.6x 2.7x 2.6x 2.6x 2.6x 5.0x 2.0x 2.5x 2.5x 2.5x 2.4x 1.5x
LTM Rev & EBITDA MultiplesEBITDA & Rev LTM 1.0x 0.0x
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
60.0% 2
50.0%
40.0%
30.0%
20.0%
10.0% LTM “Rule of 40” to EV / Rev Rev 40” to Multiple/ EV of “RuleLTM
0.0% 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 20.0x 22.0x 24.0x 26.0x 28.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA YTD Price Enterprise EBITDA Company Revenue EBITDA 2021 2020 2021 2021 Change Value Margin Verisk Analytics, Inc. (14.9%) $32,065 $2,785 $1,258 45.2% 6.8% 8.0% 11.5x 25.5x Guidewire Software, Inc. (21.1%) 7,821 762 (1) NM 8.6% 8.4% 10.3x NM CoreLogic, Inc. 2.5% 7,617 1,642 476 29.0% 14.0% 24.0% 4.6x 16.0x Duck Creek Technologies, Inc. 4.2% 5,578 224 (6) NM 23.6% 23.6% 24.9x NM LiveRamp Holdings, Inc. (29.1%) 2,820 430 (75) NM 21.6% 24.5% 6.6x NM Sapiens International Corporation N.V. 3.9% 1,735 383 66 17.1% 17.6% 17.8% 4.5x 26.5x Ebix, Inc. (15.6%) 1,657 550 143 26.1% (3.7%) (1.7%) 3.0x 11.6x MediaAlpha, Inc. (9.3%) 1,286 585 23 3.9% 43.3% – 2.2x 55.8x EverQuote, Inc. (2.8%) 1,001 347 (8) NM 39.4% 50.6% 2.9x NM FINEOS Corporation Holdings plc 5.4% 866 122 (8) NM 35.3% 37.4% 7.1x NM Quartix Holdings plc 44.3% 359 35 8 22.7% 0.8% 2.0% 10.2x 44.9x msg life ag (1.9%) 113 176 3 1.6% 16.6% 17.3% 0.6x 39.1x Mean $5,243 $670 $156 23.4% 18.7% 17.7% 7.4x 31.3x Median $1,696 $406 $5 1.3% 17.1% 17.6% 5.6x 26.5x
1The strong growths in Revenue and EBITDA multiples in Q2-Q4 2020 are mainly driven by the IPO of Duck Creek Technologies and Media Alpha 2See “Rule of 40” definition on slide 14 Source: S&P Capital IQ Quarterly Financial Technology Executive Briefing 17 Insurance Technology: Select Transactions
Q4 2020 Transactions Transaction Date Target Acquirer(s) / Lead Investor(s) Type EV / Revenue Value ($M)
3/25/21 Pie Insurance Allianz X, Acrew Capital, and others Raise $118M NA
3/8/21 AgentSync Craft Ventures, Elad Gil, and Others Raise $25M NA1
2/3/21 CCC Information Services Dragoneer Growth Opportunities M&A $7,000M 11.7x
1/26/21 Jetty Farmers Group Raise NA NA
1/26/21 Rhino Tiger Global Raise $95M NA
1/14/21 Bold Penguin American Family Insurance M&A NA NA
1/14/21 EZLynx Applied Systems M&A NA NA
1/7/21 ClaimVantage Majesco M&A NA NA
Notable Transaction
Applied Systems Acquires EZLynx2
EZLynx is an insurance agency software company, whose products include a comparative rater and an agency management system. They have over 20,000 agency customers across the country, primarily in personal lines home and auto insurance. Acquires
• Following the acquisition of ITC by Zywave, EZLynx was believed to be the largest independent agency software company across P&C not owned by h Applied, Vertafore, or Zywave • The acquisition continues a wave of consolidation in the agency technology sector, as Applied’s key competitors, Vertafore and Zywave, have made several acquisitions in the sector over the past several years Undisclosed • Applied’s acquisition of EZLynx further solidifies their status as one of the clear market leaders in the agency technology space January 14, 2021
1According to the company’s press release, valuation was $220M, 10x higher than what it was for their seed round in mid-2020 2https://www1.appliedsystems.com/en-us/news/press-releases/2021/applied-systems-completes-acquisition-of-ezlynx/ Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 18 Banking Technology: Public Company Statistics
29.8x29.8x 10.0x 28.6x28.5x 30.0x 26.7x 25.5x 9.0x 24.4x 22.9x 23.1x 25.0x 21.6x21.4x21.5x 21.0x 8.0x 20.0x 8.5x 8.5x 18.8x 7.9x 20.0x 7.0x 17.1x 7.7x 15.7x15.4x15.5x15.4x16.0x 14.6x 13.8x14.4x14.0x 14.3x 6.9x 6.0x 6.6x 6.5x 15.0x 6.1x 5.0x 5.6x 5.5x 5.2x 10.0x 4.9x 4.0x 4.7x 4.4x 4.3x 4.3x 4.0x 5.0x 3.7x 3.7x 3.7x 3.0x 3.5x 3.6x 3.7x 3.3x 3.2x 3.0x
2.0x 0.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
80.0% 1
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
LTM “Rule of 40” to EV / Rev Rev 40” to Multiple/ EV of “RuleLTM 0.0%
(10.0%) 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 20.0x 22.0x 24.0x 26.0x 28.0x 30.0x 32.0x 34.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA YTD Price Enterprise EBITDA Company Revenue EBITDA 2021 2020 2021 2021 Change Value Margin Fidelity National Information Services, Inc.(0.6%) $106,185 $12,552 $4,198 33.4% 21.5% 37.3% 8.5x 25.3x Fiserv, Inc. 4.5% 101,066 14,852 4,722 31.8% 45.8% 95.8% 6.8x 21.4x Wolters Kluwer N.V. 7.3% 25,488 5,631 1,648 29.3% (0.2%) 2.8% 4.5x 15.5x Black Knight, Inc. (16.3%) 14,306 1,239 425 34.3% 5.2% 2.9% 11.6x 33.7x NICE Ltd. (19.8%) 13,022 1,648 426 25.8% 4.7% 5.7% 7.9x 30.6x Jack Henry & Associates, Inc. (6.3%) 11,462 1,714 449 26.2% 5.1% 7.1% 6.7x 25.5x Temenos AG 10.0% 11,262 887 251 28.3% (8.7%) (0.8%) 12.7x 44.9x Pegasystems Inc. (14.2%) 9,303 1,018 (122) NM 11.6% 11.7% 9.1x NM nCino, Inc. 12.2% 5,783 186 (32) NM 40.0% 51.0% 31.1x NM Q2 Holdings, Inc. (20.8%) 5,635 403 (55) NM 27.7% 28.7% 14.0x NM Computer Services, Inc. (0.7%) 1,556 289 100 34.7% 3.7% 5.1% 5.4x 15.5x Intellect Design Arena Limited 138.9% 1,273 200 35 17.7% 5.3% (3.1%) 6.4x 36.1x Crealogix Holding AG 1.3% 161 109 1 0.8% 1.7% 1.4% 1.5x NM Mean $23,577 $3,133 $927 29.6% 12.6% 18.9% 9.7x 27.6x Median $11,262 $1,018 $251 24.6% 5.2% 5.7% 7.9x 25.5x
1See “Rule of 40” definition on slide 15 Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 19 Banking Technology: Select Transactions
Q4 2020 Transactions Transaction Date Target Acquirer(s) / Lead Investor(s) Type EV / Revenue Value ($M)
3/23/21 Jumio Great Hill Partners Raise $150M NA
3/9/21 M1 Finance Coatue, Left Lane Capital, and others Raise $75M NA
Fidelity, Qatar Investment Authority, and 3/8/21 Starling Raise $376M NA others
2/10/21 NYMBUS Insight Venture Management Raise $53M NA
Eurazeo Growth, Sprints Capital, and 1/19/21 PPRO Raise $180M NA Wellington Management
1/13/21 Blend Labs Coatue, and Tiger Global Raise $300M NA
Wheatsheaf Group, Frontier Agriculture, 1/7/21 Oxbury Raise $27M NA and Hutchinson Group
1/7/21 Mambu TCV, Tiger Global, and others Raise $135M NA
Notable Transaction
Blend Labs Raises $300M at a $3.3B valuation1
Blend Labs is a mortgage technology company that sells a white-labeled & digital lending platform to banks. Its technology processes over $4B in transactions a day, and over $1.4T in mortgages in 2020.
• Blend has a blue-chip customer base of over 285 financial institutions Invests In including Wells Fargo, US Bank, Navy Federal Credit Union, BMO Harris, among several others h • The Company grew rapidly in 2020, hiring over 200 full-time employees and expanding their customer base. Blend’s customers now account for ~30% of the U.S. mortgage market • Blend will use the new funding to further expand their product offerings and $300 Million services to their growing customer base • With home buying on the rise, mortgage technology figures to be an January 13, 2021 attractive sector moving forward
¹https://www.bizjournals.com/sanfrancisco/news/2021/01/13/blend-fintech-san-francisco-300-million-3-billion.html Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 20 Payments: Public Company Statistics
10.0x 30.0x 25.3x 9.0x 23.9x24.1x 22.8x22.8x 25.0x 21.9x 22.5x 9.1x 9.1x 8.0x 8.8x 19.4x 19.4x 19.7x 8.5x 18.7x 19.0x18.7x 17.5x 18.1x 17.7x 20.0x 7.0x 16.8x17.0x 16.9x 16.7x 7.8x 15.8x 16.0x 7.3x 15.0x14.7x15.0x 7.2x 13.8x 6.9x 7.0x 6.0x 15.0x 6.3x 5.9x 5.9x 5.9x 5.0x 5.5x 5.6x 10.0x 5.0x 4.8x 4.0x 4.5x 4.5x 4.4x 4.3x 4.4x 4.1x 4.0x 4.1x 4.1x 5.0x 3.0x
LTM Rev & EBITDA MultiplesEBITDA & Rev LTM 2.0x 0.0x
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
120.0% 1 100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
(20.0%)
(40.0%)
LTM “Rule of 40” to EV / Rev Rev 40” to Multiple/ EV of “RuleLTM (60.0%) 0.0x 3.0x 6.0x 9.0x 12.0x 15.0x 18.0x 21.0x 24.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA YTD Price Enterprise EBITDA Company Revenue EBITDA 2021 2020 2021 2021 Change Value Margin Visa (3.2%) $459,222 $21,479 $14,736 68.6% (8.7%) (4.9%) 21.4x 31.2x Mastercard (0.2%) 356,264 15,301 8,742 57.1% (9.4%) (4.2%) 23.3x 40.8x PayPal 3.7% 281,094 21,454 4,295 20.0% 20.7% 19.1% 13.1x 65.4x Fidelity National Information Services (0.6%) 106,185 12,552 4,198 33.4% 21.5% 37.3% 8.5x 25.3x Square 4.3% 102,484 9,498 46 0.5% 101.5% 76.6% 10.8x NM Fiserv 4.5% 101,066 14,852 4,722 31.8% 45.8% 95.8% 6.8x 21.4x Global Payments (6.4%) 67,964 7,424 2,828 38.1% 51.1% 96.6% 9.2x 24.0x Adyen (0.1%) 64,730 4,454 471 10.6% 37.1% 41.1% 14.5x NM Fleetcor Technologies (1.5%) 25,986 2,389 1,182 49.5% (9.8%) (4.7%) 10.9x 22.0x StoneCo (27.0%) 18,062 295 (11) NM 39.0% 36.4% 61.2x NM Edenred (4.0%) 14,427 1,741 618 35.5% (9.4%) (2.8%) 8.3x 23.4x WEX 2.8% 11,695 1,553 360 23.2% (9.0%) (2.8%) 7.5x 32.5x Euronet Worldwide (4.6%) 7,075 2,483 280 11.3% (9.7%) (8.7%) 2.8x 25.2x EVO Payments 1.9% 2,531 439 104 23.7% (9.6%) (10.9%) 5.8x 24.3x Bottomline Technologies (14.2%) 2,058 451 41 9.2% 3.7% 4.4% 4.6x 49.8x i3 Verticals (6.3%) 880 152 17 11.1% (54.2%) (60.1%) 5.8x 52.0x Cass Information Systems 18.9% 2 148 44 29.7% (8.9%) (7.1%) 0.0x 0.0x Mean $95,396 $6,863 $2,510 36.6% 11.3% 17.7% 12.6x 31.2x Median $25,986 $2,483 $471 19.0% (8.7%) (2.8%) 8.5x 25.3x Note: Cass Information Systems and StoneCo do not appear on graph because their metrics are out of range 1See “Rule of 40” definition on slide 15 Source: S&P Capital IQ Quarterly Financial Technology Executive Briefing 21 Payments: Select Transactions
Q1 2021 Transactions Transaction Date Target Acquirer(s) / Lead Investor(s) Type EV / Revenue Value ($M)
3/31/21 Pineapple Payments Fiserv M&A NA NA
Brookfield Asset Management, NEA, and 1/27/21 Loanpal Raise $800M NA others
1/25/21 Alma Cathay Innovation, Idinvest, and others Raise $59M NA
1/14/21 MoMo Warburg Pincus and Goodwater Raise $100M NA
Valar Ventures, Cherry Ventures, Global 1/14/21 Moss Raise $26M NA Founders Capital
1/13/21 Rapyd Coatue, Spark Capital, and others Raise $300M NA
Tiger Global Management and Greenoaks 1/12/21 Checkout.com Raise $450M NA Capital
IDC Ventures, Fuel Venture Capital, and 1/11/21 Curve OS Raise $95M NA others
Notable Transaction
Coatue Leads $300M Investment in Rapyd at $2.5B Valuation1
Rapyd operates a financial transaction network, powering cashless cross- border digital payments and transactions for businesses, individuals, banks, and more. Their platform also has digital banking and fraud detection capabilities Leads an • The capital raise comes in the wake of the COVID-19 pandemic, which has Investment in moved significant amounts of financial transactions online h • Rapyd is currently achieving its strongest growth in company history, adding around 500 new customers a week • CEO & Co-Founder Arik Shtilman said that the use of funds would be to expand the team and build new products – namely expanded fraud ID $300 Million services and a larger marketplace • The funding also enables Rapyd to make targeted acquisitions to fuel January 13, 2021 further growth
¹https://techcrunch.com/2021/01/13/rapyd-raises-300m-on-a-2-5b-valuation-to-boost-its-fintech-as-a-service-api/ Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 22 Data & Analytics: Public Company Statistics
8.0x 46.0x 7.0x 7.5x 7.5x 7.5x 7.3x 41.0x 7.0x 6.9x 6.0x 6.4x 36.0x 6.1x 6.0x 5.8x 5.9x 31.0x 25.0x 25.2x25.0x25.0x 5.0x 5.4x 24.3x 22.6x22.0x 26.0x 5.0x 5.0x 5.0x 5.0x 5.0x 4.8x 4.9x 19.8x 20.2x 4.6x 18.4x18.4x 4.5x 17.3x 21.0x 4.0x 16.1x 16.8x16.5x 4.2x 4.2x 4.2x 15.6x15.7x15.5x 15.7x15.5x 14.2x14.0x 14.1x 12.8x4.0x 13.0x3.9x 13.6x 16.0x 3.0x 11.0x
2.0x 6.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
70.0% 1 60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
(10.0%) LTM “Rule of 40” to EV / Rev Rev 40” to Multiple/ EV of “RuleLTM 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 20.0x 22.0x 24.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA YTD Price Enterprise EBITDA Company Revenue EBITDA 2021 2020 2021 2021 Change Value Margin S&P Global Inc. 7.3% $88,482 $7,442 $4,073 54.7% 11.1% 12.4% 11.9x 21.7x Moody's Corporation 2.9% 60,310 5,371 2,661 49.5% 11.2% 14.1% 11.2x 22.7x IHS Markit Ltd. 7.7% 46,382 4,327 1,611 37.2% (2.7%) (2.9%) 10.7x 28.8x Thomson Reuters Corporation 5.7% 45,119 5,984 1,389 23.2% 1.3% 1.7% 7.5x 32.5x MSCI Inc. (6.1%) 36,937 1,695 947 55.9% 8.8% 9.6% 21.8x 39.0x Experian plc (10.1%) 35,923 5,171 1,563 30.2% 3.6% 5.0% 6.9x 23.0x Verisk Analytics, Inc. (14.9%) 32,065 2,785 1,258 45.2% 6.8% 8.0% 11.5x 25.5x Equifax Inc. (6.1%) 25,027 4,128 1,092 26.5% 17.7% 13.9% 6.1x 22.9x TransUnion (9.3%) 20,430 2,717 968 35.6% 2.3% 4.6% 7.5x 21.1x Fair Isaac Corporation (4.9%) 15,006 1,308 401 30.7% 9.4% 11.6% 11.5x 37.4x Black Knight, Inc. (16.3%) 14,306 1,239 425 34.3% 5.2% 2.9% 11.6x 33.7x FactSet Research Systems Inc. (7.2%) 11,983 1,538 518 33.7% 4.9% 4.5% 7.8x 23.1x Morningstar, Inc. (2.8%) 9,817 1,390 329 23.6% 17.9% 20.9% 7.1x 29.9x CoreLogic, Inc. 2.5% 7,617 1,642 476 29.0% 14.0% 24.0% 4.6x 16.0x LiveRamp Holdings, Inc. (29.1%) 2,820 430 (75) NM 21.6% 24.5% 6.6x NM Daily Mail and General Trust plc 21.9% 2,593 1,556 149 9.6% (10.0%) – 1.7x 17.4x Value Line, Inc. (14.5%) 241 40 9 22.2% 2.0% 8.5% 6.0x 26.9x Mean $26,768 $2,868 $1,047 36.5% 7.4% 9.6% 8.9x 26.3x Median $20,430 $1,695 $947 55.9% 6.8% 8.5% 7.5x 24.3x
1See “Rule of 40” definition on slide 15 Source: S&P Capital IQ
Quarterly Financial Technology Executive Briefing 23 Data & Analytics: Select Transactions
Q1 2021 Transactions Transaction Date Target Acquirer(s) / Lead Investor(s) Type EV / Revenue Value ($M)
3/24/21 Feedzai KKR and others Raise $200M NA
Insight Venture Management, Israel 2/21/21 Earnix Raise $75M NA Growth Partners, and others
2/4/21 CoreLogic Stone Point Capital and Insight Partners M&A $7,782M 4.5x
In-Q-Tel, S&P Global, and Snowflake 1/21/21 Quantifind Raise $22M NA Ventures
1/19/21 Corsis Crosslake Technologies M&A NA NA
1/13/21 MX Technologies TPG Growth, CapitalG, and others Raise $300M NA
1/6/21 Groundspeed Analytics Insight Partners and Oak HC/FT Raise NA NA
1/5/21 HG Insights Riverwood Capital Raise NA NA
Notable Transaction
Stone Point Capital and Insight Partners Agree to Acquire CoreLogic1
CoreLogic is a market leader in the property information and analytics space, & serving a diverse array of customers across several industries including real estate, mortgage, financial services, insurance, government, and more. They provide a mix of proprietary, public, and contributory data. Agree to • Stone Point and Insight agreed to acquire all CoreLogic (NYSE: CLGX) Acquire shares for $80 per share – a 51% premium when compared to their h unaffected share price on June 25th, 2020 • CoreLogic has been the subject of take private rumors in the past, with numerous other parties making bids dating back to last summer • The board’s selection of Stone Point and Insight’s bid was the result of the $7.8 Billion value and high degree of regulatory certainty and a near term closing according to CoreLogic Chairman Paul Folino February 4, 2021
1https://investor.corelogic.com/pressreleases/corelogic-enters-definitive-agreement-be-acquired-stone-point-capital-and-insight Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 24 Service Providers: Public Company Statistics
15.8x15.6x15.7x 3.5x 15.0x 16.0x 14.4x 13.9x14.0x 14.1x 13.6x 13.7x 13.7x 13.1x 14.0x 12.7x 3.2x 3.0x 12.3x 12.4x 12.4x 12.1x12.0x 12.1x 11.9x 11.5x 11.7x 3.0x 11.3x11.1x11.3x 12.0x 10.5x 2.5x 2.6x 2.5x 2.4x 10.0x 2.4x 2.4x 2.4x 2.4x 2.3x 2.3x 2.3x 2.3x 2.3x 2.3x 2.3x 2.3x 2.3x 2.2x 2.0x 2.2x 2.1x 2.1x 2.1x 2.1x 2.1x 8.0x
1.8x
1.5x 6.0x LTM Rev & EBITDA MultiplesEBITDA & Rev LTM
Enterprise Value / LTM Revenue Enterprise Value / LTM EBITDA
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
LTM Rev Growth to EV / Rev Multiple / EV Growth Rev Rev LTM to (5.0%)
(10.0%) 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA YTD Price Enterprise EBITDA Company Revenue EBITDA 2021 2020 2021 2021 Change Value Margin International Business Machines 5.9% $171,866 $73,621 $15,279 20.8% (4.6%) (2.7%) 2.3x 11.2x Accenture plc 5.8% 170,436 45,677 7,589 16.6% 2.3% 1.7% 3.7x 22.5x Tata Consultancy Services Limited 8.5% 160,343 21,967 6,003 27.3% 3.5% 3.8% 7.3x 26.7x Infosys Limited 8.5% 76,610 13,145 3,470 26.4% 4.0% 3.9% 5.8x 22.1x Cognizant Technology Solutions (4.7%) 40,508 16,652 2,914 17.5% (0.8%) 0.7% 2.4x 13.9x Capgemini SE 14.4% 35,980 19,386 2,422 12.5% 12.2% 9.6% 1.9x 14.9x HCL Technologies Limited 3.4% 35,360 10,022 2,655 26.5% 3.6% 6.7% 3.5x 13.3x Wipro Limited 6.8% 26,021 8,409 1,772 21.1% 1.8% 2.2% 3.1x 14.7x CGI Inc. 3.7% 22,760 9,519 1,662 17.5% (0.6%) 0.4% 2.4x 13.7x Broadridge Financial Solutions, Inc. (0.1%) 20,468 4,684 982 21.0% 7.6% 6.0% 4.4x 20.8x DXC Technology Company 21.4% 12,182 18,159 2,531 13.9% (9.4%) (6.5%) 0.7x 4.8x Genpact Limited 3.5% 9,310 3,709 628 16.9% 5.4% 8.3% 2.5x 14.8x Computershare Limited 3.1% 7,983 2,268 480 21.1% (3.9%) (3.5%) 3.5x 16.6x Mindtree Limited 25.6% 4,430 1,083 196 18.1% 4.7% 6.4% 4.1x 22.6x Mphasis Limited 16.5% 4,381 1,307 220 16.8% 12.0% 13.8% 3.4x 19.9x WNS (Holdings) Limited 0.5% 3,507 917 157 17.1% 3.0% 7.9% 3.8x 22.3x ExlService Holdings, Inc. 5.9% 2,946 958 155 16.2% (3.3%) (0.3%) 3.1x 19.0x Crawford & Company 34.6% 743 982 84 8.5% (2.3%) (4.9%) 0.8x 8.9x Mean $44,769 $14,026 $2,733 19.5% 2.0% 3.0% 3.3x 16.8x Median $21,614 $8,964 $1,717 19.2% 2.6% 3.0% 3.2x 15.7x
Quarterly Financial Technology Executive Briefing 25 Source: S&P Capital IQ Service Providers: Select Transactions
Q1 2021 Transactions Transaction Date Target Acquirer(s) / Lead Investor(s) Type EV / Revenue Value ($M)
3/25/21 Snapsheet Ping An Insurance & Others Raise $30M NA
3/16/21 Davies BC Partners M&A $1,700M NA
2/8/21 Thrive Court Square Capital M&A NA NA
2/3/21 Seek Now Susquehanna Growth Equity Raise NA NA
2/1/21 FourSeventy Claims Alacrity M&A NA NA
1/7/21 Paragon Asset Recovery Services Altus M&A NA NA
1/7/21 Hancock Claims Consultants Century Equity Partners M&A NA NA
1/6/21 Finetix Options Technology M&A NA NA
Notable Transaction
Susquehanna Growth Equity Makes an Investment In Seek Now1
Seek Now is a leading provider of technology-enabled insurance claims and inspections services to top P&C Carriers across the country. They have especially strong expertise in roof inspections. Makes an Investment • The COVID-19 pandemic has driven a high level of market demand for virtual and technology-enabled insurance inspections as compared to more in traditional field inspections h • The investment should enable Seek Now to continue to invest in technology, sell to new carriers, and make strategic acquisitions (the Company acquired Nashville-based Real Estate technology firm HouseLens in March) Undisclosed • Seek Now’s competitor, Hancock Claims Consultants, also raised capital this quarter, indicating a strong M&A market for tech-enabled claims February 3, 2021 services providers
1https://seek-now.com/seek-now-receives-significant-growth-investment-from-susquehanna-growth-equity/ Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 26 Traditional Financial Institutions
10.0x 16.0x
13.9x 9.0x 14.0x
12.4x 11.9x 11.8x 8.0x 11.7x11.5x 11.6x 11.3x 11.3x11.3x11.2x 12.0x 10.8x 10.7x 10.7x 10.5x10.5x 7.0x 10.0x 9.9x 9.6x 9.6x 9.3x 9.3x 9.2x 9.0x 10.0x 9.0x 8.8x 6.0x 8.0x 5.0x
6.0x 4.0x
4.0x
3.0x LTM Rev & EBT EBT & MultiplesRev LTM 2.8x 2.6x 2.7x 2.5x 2.5x 2.5x 2.0x 2.0x 2.4x 2.4x 2.3x 2.3x 2.2x 2.2x 2.3x 2.2x 2.0x 2.1x 2.1x 2.0x 2.0x 1.9x 1.9x 1.8x 1.8x 1.8x 1.8x 1.0x 1.5x 0.0x
Market Capitalization / LTM Revenue Market Capitalization / LTM EBT Ex. Unusual Items
Notable Transaction
M&T Bank to Acquire People’s United Bank for $7.6B1
People’s United is a Bridgeport, CT based bank that is one of the largest community banks serving the New England region. It provides comprehensive banking services to its customers including retail banking, commercial banking, wealth management, and more. Agrees to
• The transaction expands M&T Bank’s footprint into the New England Acquire region, and the combined company will have over $200B in AUM, 1,100 h branches, and 2,000 ATMs across 12 states on the east coast • The combined company is expected to be the largest community bank in the Northeast and Mid-Atlantic, serving a region that accounts for over 20% of the US population and 25% of national GDP $7.6 Billion • People’s United's Bridgeport headquarters will serve as M&T’s regional HQ for New England after closing February 22, 2021
1https://www.peoples.com/press/2021/mt-bank-corporation-announces-agreement-to-acquire-peoples-united-financial-inc Source: S&P Capital IQ and publicly available records
Quarterly Financial Technology Executive Briefing 27 Traditional Financial Institutions by Segment (1/2)
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA YTD Price Enterprise EBITDA Company Revenue EBITDA 2021 2020 2021 2021 Change Value Margin Banks JPMorgan Chase & Co. 19.8% $464,531 $102,063 $36,522 35.8% (7.1%) (8.7%) 4.6x 12.7x Bank of America Corporation 27.6% 333,788 74,208 18,995 25.6% (13.3%) (12.1%) 4.5x 17.6x Wells Fargo & Company 29.5% 161,521 58,319 2,117 3.6% (29.3%) (28.9%) 2.8x 76.3x Citigroup Inc. 18.0% 151,806 58,369 13,632 23.4% (11.7%) (10.8%) 2.6x 11.1x Morgan Stanley 13.3% 146,029 48,198 14,973 31.1% 16.4% 16.1% 3.0x 9.8x HSBC Holdings plc 12.5% 117,998 41,612 9,867 23.7% (22.0%) (17.1%) 2.8x 12.0x The Goldman Sachs Group, Inc. 24.0% 111,251 41,462 15,899 38.3% 16.9% 17.5% 2.7x 7.0x U.S. Bancorp 18.7% 83,107 19,242 6,051 31.4% (9.0%) (10.1%) 4.3x 13.7x BNP Paribas SA 20.4% 76,059 48,426 12,009 24.8% (7.9%) (3.3%) 1.6x 6.3x The PNC Financial Services Group, Inc. 17.7% 74,377 13,726 3,429 25.0% (14.6%) (11.2%) 5.4x 21.7x Mitsubishi UFJ Financial Group, Inc. 29.7% 68,718 34,864 3,267 9.4% (8.6%) 6.0% 2.0x 21.0x UBS Group AG 17.4% 55,150 32,386 8,225 25.4% 12.1% 8.2% 1.7x 6.7x Mean $153,695 $47,740 $12,082 25.3% (6.5%) (4.5%) 3.2x 18.0x Median $114,625 $44,905 $10,938 24.4% (8.8%) (9.4%) 2.8x 12.3x Securities Broker Dealers The Charles Schwab Corporation 22.9% $122,691 $11,691 $4,723 40.4% 9.0% (6.1%) 10.5x 26.0x Ameriprise Financial, Inc. 19.6% 27,104 11,958 1,835 15.3% (7.2%) (8.6%) 2.3x 14.8x MarketAxess Holdings Inc. (12.7%) 18,919 689 375 54.5% 34.8% 31.1% 27.5x 50.4x Raymond James Financial, Inc. 28.1% 16,878 7,969 1,177 14.8% 1.8% 0.8% 2.1x 14.3x LPL Financial Holdings Inc. 36.4% 11,358 5,872 626 10.7% 4.4% 4.4% 1.9x 18.1x Voya Financial, Inc. 8.2% 7,879 7,649 422 5.5% 2.3% 11.3% 1.0x 18.7x Virtu Financial, Inc. 23.4% 3,794 2,929 1,347 46.0% 142.6% 103.7% 1.3x 2.8x TP ICAP Group PLC 2.2% 2,645 2,381 261 11.0% (2.2%) 2.2% 1.1x 10.1x Monex Group, Inc. 142.0% 2,162 589 101 17.2% 25.1% 10.3% 3.7x 21.3x BGC Partners, Inc. 20.8% 1,785 1,980 127 6.4% (3.1%) (1.5%) 0.9x 14.1x Waddell & Reed Financial, Inc. (1.6%) 1,558 1,049 142 13.5% (1.9%) (2.9%) 1.5x 11.0x Compagnie Financière Tradition SA 8.6% 932 1,021 98 9.6% (1.1%) 2.7% 0.9x 9.5x Mean $18,142 $4,648 $936 20.1% 17.0% 12.3% 4.6x 17.6x Median $5,836 $2,655 $399 15.0% 2.1% 2.5% 1.7x 14.6x Investment Managers BlackRock, Inc. 4.5% $115,080 $16,205 $5,587 34.5% 11.5% 12.2% 7.1x 20.6x The Blackstone Group Inc. 15.0% 49,284 6,189 2,618 42.3% (12.3%) (16.5%) 8.0x 18.8x The Bank of New York Mellon Corporation11.4% 41,555 15,472 4,468 28.9% (6.2%) 4.6% 2.7x 9.3x T. Rowe Price Group, Inc. 13.3% 39,031 6,207 3,242 52.2% 10.5% 9.0% 6.3x 12.0x State Street Corporation 15.4% 29,554 11,615 3,082 26.5% (1.1%) (0.1%) 2.5x 9.6x Northern Trust Corporation 12.9% 21,854 5,976 1,680 28.1% (1.8%) (0.8%) 3.7x 13.0x Amundi SA 2.1% 16,162 3,222 1,523 47.3% (46.0%) (1.4%) 5.0x 10.6x Franklin Resources, Inc. 18.4% 14,960 6,172 1,541 25.0% 9.3% (1.8%) 2.4x 9.7x Invesco Ltd. 44.7% 11,481 6,146 1,428 23.2% 0.5% 11.1% 1.9x 8.0x Affiliated Managers Group, Inc. 46.5% 6,352 2,028 514 25.4% (9.5%) (9.8%) 3.1x 12.4x Oppenheimer Holdings Inc. 27.4% 508 1,183 181 15.3% 19.8% 13.0% 0.4x 2.8x Mean $31,438 $7,310 $2,351 32.2% (2.3%) 1.8% 3.9x 11.5x Median $21,854 $6,172 $1,680 27.2% (1.1%) (0.1%) 3.1x 10.6x
Source: S&P Capital IQ and publicly available records Quarterly Financial Technology Executive Briefing 28 Traditional Financial Institutions by Segment (2/2)
($M) LTM Performance Revenue Growth EV / Revenue EV / EBITDA YTD Price Enterprise EBITDA Company Revenue EBITDA 2021 2020 2021 2021 Change Value Margin Exchanges Hong Kong Exchanges and Clearing 7.6% $74,471 $2,457 $1,717 69.9% 17.0% 10.6% 30.3x 43.4x CME Group Inc. 12.2% 73,330 4,870 2,748 56.4% 0.3% (1.0%) 15.1x 26.7x Intercontinental Exchange, Inc. (3.1%) 62,590 6,036 2,859 47.4% 16.0% 8.5% 10.4x 21.9x Deutsche Börse AG 1.8% 30,522 4,547 2,045 45.0% 12.5% 9.1% 6.7x 14.9x Nasdaq, Inc. 11.1% 24,189 5,627 1,299 23.1% 32.0% 20.7% 4.3x 18.6x B3 S.A. - Brasil, Bolsa, Balcão (11.9%) 19,656 1,614 1,021 63.2% 41.9% 36.1% 12.2x 19.3x Japan Exchange Group, Inc. (1.6%) 12,559 1,294 727 56.2% 14.6% 8.1% 9.7x 17.3x Cboe Global Markets, Inc. 6.2% 10,606 3,427 679 19.8% 37.3% 20.3% 3.1x 15.6x Euronext N.V. (4.7%) 7,024 1,082 562 52.0% 30.2% 28.8% 6.5x 12.5x TMX Group Limited 2.7% 5,843 805 316 39.3% (11.6%) (1.8%) 7.3x 18.5x Mean $32,079 $3,176 $1,397 44.0% 19.0% 14.0% 10.5x 20.9x Median $21,923 $2,942 $1,160 39.4% 16.5% 9.9% 8.5x 18.5x Insurance Brokers Marsh & McLennan Companies, Inc. 4.1% $62,055 $17,224 $3,158 18.3% 3.4% 6.0% 3.6x 19.7x Aon plc 8.9% 52,001 11,066 2,570 23.2% 0.5% 0.8% 4.7x 20.2x Willis Towers Watson 8.6% 29,961 9,352 1,491 15.9% 3.5% 6.4% 3.2x 20.1x Arthur J. Gallagher & Co. 0.9% 24,353 6,782 1,001 14.8% (1.6%) (1.1%) 3.6x 24.3x Brown & Brown, Inc. (3.6%) 12,958 2,611 617 23.6% 9.4% 9.9% 5.0x 21.0x Goosehead Insurance, Inc (14.1%) 1,977 116 18 15.2% 51.2% 22.6% 17.0x NM eHealth, Inc. 3.0% 1,886 583 54 9.3% 15.1% 74.2% 3.2x 34.9x Huize Holding Limited 19.6% 435 187 (3) NM 22.8% 19.3% 2.3x NM DFV Deutsche (41.5%) 229 77 (13) NM 8.0% 17.0% 3.0x NM Mean $20,651 $5,333 $988 18.5% 12.5% 17.2% 5.1x 23.4x Median $12,958 $2,611 $617 23.6% 8.0% 9.9% 3.6x 20.6x P&C Insurance Carriers Chubb Limited 2.6% $71,122 $36,052 $4,162 11.5% 5.3% 5.6% 2.0x 17.1x The Progressive Corporation (3.3%) 55,941 42,638 7,173 16.8% 9.3% 15.6% 1.3x 7.8x The Travelers Companies, Inc. 7.1% 38,849 31,981 3,237 10.1% 1.3% 1.1% 1.2x 12.0x The Allstate Corporation 4.5% 34,800 44,791 8,203 18.3% 0.3% 3.7% 0.8x 4.2x The Hartford Financial Services Group 36.4% 23,878 20,494 2,256 11.0% (1.2%) 2.6% 1.2x 10.6x ZhongAn Online P&C Insurance 29.6% 8,866 2,814 36 1.3% 22.0% 27.4% 3.2x NM The Hanover Insurance Group, Inc. 10.7% 4,710 4,827 451 9.3% (1.3%) 1.1% 1.0x 10.4x Mercury General Corporation 16.5% 3,366 3,785 459 12.1% (4.7%) (2.6%) 0.9x 7.3x State Auto Financial Corporation 11.1% 868 1,482 14 1.0% 5.3% 7.8% 0.6x 60.3x Mean $26,933 $20,985 $2,888 13.8% 4.0% 6.9% 1.3x 16.2x Median $23,878 $20,494 $2,256 11.0% 1.3% 3.7% 1.2x 10.5x Health / Life Insurance Carriers UnitedHealth Group Incorporated 6.1% $351,725 $257,141 $20,742 8.1% 6.2% 5.4% 1.4x 17.0x Anthem, Inc. 11.8% 87,909 121,868 7,475 6.1% 16.9% 17.3% 0.7x 11.8x Cigna Corporation 16.1% 83,976 160,550 7,447 4.6% 4.4% 21.1% 0.5x 11.3x Prudential plc 14.4% 55,228 55,973 2,457 4.4% (40.3%) (43.5%) 1.0x 22.5x Humana Inc. 2.2% 54,088 77,155 4,674 6.1% 18.9% 18.5% 0.7x 11.6x MetLife, Inc. 29.5% 53,763 67,842 6,927 10.2% (2.6%) (3.8%) 0.8x 7.8x Aflac Incorporated 15.1% 35,191 22,147 4,159 18.8% (0.7%) 0.0% 1.6x 8.5x Sun Life Financial Inc. 12.2% 29,554 34,011 2,366 7.0% 9.2% 2.2% 0.9x 12.5x Lincoln National Corporation 23.8% 11,953 17,439 511 2.9% 1.0% 1.2% 0.7x 23.4x Magellan Health, Inc. 12.6% 2,421 4,578 (4) NM 0.3% 34.9% 0.5x NM Mean $76,581 $81,870 $5,675 6.9% 1.3% 5.3% 0.9x 14.0x Median $53,926 $61,908 $4,417 7.1% 2.7% 3.8% 0.8x 11.8x Total Traditional Financial Institutions Mean $53,736 $24,608 $3,941 16.0% 6.2% 7.2% 4.2x 17.0x Median $29,554 $6,782 $1,835 27.1% 2.3% 4.6% 2.7x 13.9x
Source: S&P Capital IQ and publicly available records Quarterly Financial Technology Executive Briefing 29 MORGAN PARTNERS LLC MEMBER, FINRA/SIPC 100 WORCESTER STREET, SUITE 202 WELLESLEY, MA 02481 +1 (617) 410-5200 WWW.MORGANPARTNERS.COM
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Quarterly Financial Technology Executive Briefing 30