There have been a number of high profile mergers and acquisitions (M&A) in the fintech sector over the past few years and reports suggest that after deal volumes and valuations peaked in 2014, this trend has continued into 2015, with this summer in particular seeing a surge in the number of deals. According to a report into M&A activity in the first half of 2015 by independent investment bank, Berkery Noyes, there were reportedly 192 fintech mergers and acquisitions worth $18.9 billion so far this year, and six of the top ten largest deals in the first half of 2015 were made in the payments segment.
bobsguide explores some of the biggest deals so far this year.
1. FIS and SunGard
In early August, provider of banking and payments technology Fidelity National Information Services Inc. (FIS) agreed to buy bank software provider SunGard Data Systems for $9.1 billion. This is not the first big deal that SunGard, which acquired a considerable amount of debt during the financial crisis ($4 billion), has gone through, and back in 2005 the company was bought for $11.4 billion by a group of ten private-equity firms. SunGard, which provides software to thousands of banks, asset managers, private-equity firms and insurance, has struggled to keep up with the changing technology landscape, accumulated billions of dollars in buyout debt, and faced challenges over shared control by the company’s backers.
2. CSC and Fixnetix
Also in August, UK trading technology group Fixnetix was acquired by US technology provider CSC for an undisclosed amount, but according to the people familiar with the talks, equates to about $30 a Fixnetix share, giving the UK group a valuation of over $100 million, the FT reports. The deal will close in the final quarter of this year and will continue to be backed by their largest shareholder, venture capital group Delta Partners. Reports suggest that previous owners, Intercontinental Exchange, planned a breakdown for the company after an $11 billion purchase of the exchange in 2012, but sold their stake for just £200 last year.
3. Optimal Payments and Skrill
At the beginning of August, the Financial Conduct Authority (FCA) approved a $1.2 billion offer made by online payment provider Optimal Payments to buy digital payments business Skrill. According to reports, through the acquisition, Optimal Payments intends to become a market leader in the online and mobile payments market and this week said that it has begun seeking admission to the London Stock Exchange, in a move that the FT says will most likely propel the company into the FTSE 250.
4. SS&C Technologies and Advent Software
In July, cloud-based financial software company SS&C Technologies completed its acquisition of investment management software provider Advent Software. Under the terms of the agreement, Advent stockholders will receive $44.25 per share consideration, in a deal worth approximately $2.63 billion. Reports suggest that although SS&C had already acquired two leading account platforms at the time of the Advent annoucement, the deal was strategically made by SS&C who intend to make use of Advent's substantial list of buy-side clients and product line-up. SS&C also aquired Citigroup's Alternative Investor Services business, in August for $425 million.
5. Private Equity Consortium and ICBPI
Back in June, Private Equity funds Advent International, Clessidra and Bain Capital agreed to buy Italian banking service provider ICBPI. The deal is reportedly worth $2.4 billion and current ICBPI shareholders will reportedly keep an 8 per cent stake after the acquisition which Reuters reports is subject to clearance from the European Central Bank and antitrust authorities.
6. Basware and Procserve
At the beginning of April, Finnish firm Basware, which provides enterprise software for financial processes, aquired UK rival Procserve for $27 million. According to reports, since EU regulators have taken steps to implement measures that encourage the fintech sector in recent years, e-invoicing firms such as Basware have seen steady growth.
7. D+H and Fundtech
At the end of April, FinTech provider DH Corporation (D+H) completed a $1.25 billion acquisition of global bank payments solution provider Fundtech. The deal helps to solidify D+H as a global fintech provider with the expansion into global payments. Back in 2009, Fundtech was involved in an M&A battle, in which ACI Worldwide hindered S1’s attempts to merge with Fundtech, resulting in the company doing the deal with private equity firm GTCR instead.