March was a busy month for fintech M&A, a potential early indicator that the predicted acceleration in market consolidation might be starting to take effect.
The most notable deal of the month was the C$4.8bn acquisition of DH Corp by private equity group Vista.
DH Corp will immediately be merged with Vista’s other fintech powerhouse, Misys. The merger will create a single company that will instantly be recognised as a global giant in the fintech industry, employing 10,000 people and generating in excess of $2.2bn of revenue. The clients of the combined companies currently span 130 countries and include 48 of the world’s 50 biggest banks.
For a full breakdown of the Misys-D+H merger, including its implications for the fintech industry as a whole, read bobsguide’s Is the Misys, D+H merger the first domino that will set off a fintech “super-merger” trend? article.
In other news, one of the M&A stories of the month that garnered most attention in both the industry and media was a deal that didn’t take place, after the EU Commission torpedoed the proposed merger between Deutsche Börse and London Stock Exchange Group.
Both entities appeared to take the decision in their stride, but were understandably bemused and frustrated by the Commission's verdict.
Joachim Faber, Chairman of the Supervisory Board of Deutsche Börse AG, told press: “The prohibition is a setback for Europe, the Capital Markets Union and the bridge between continental Europe and Great Britain. A rare opportunity to create a global market infrastructure provider based in Europe and to strengthen the global competitiveness of Europe’s financial markets has been missed.”
LSE Group for its part has been searching for a merger partner for a while now, this latest setback is unlikely to quell that desire. The LSE Group-Deutsche Börse deal was the third attempt to create an Anglo-German exchange in the alst 17 years.
Margrethe Vestager, EU Competition Regulator, nixed the deal that had been in the works for 15 months, ostensibly because neither LSE Group nor Deutsche Börse sufficiently alleviated her fears on market concentration in fixed income clearing.
Vestager said: “The commission cannot allow the creation of monopolies, and this is what would have happened in this case.” This was a direct reference to the supposed monopoly the merger would have given a new LSE-Deutsche Börse Group in fixed income markets.
A more speculative reason for the merger’s failure was a disagreement between LSE Group and Deutsche Börse over where the headquarters of the new merged Group would be located, particularly in light of Brexit, with neither side refusing to budge from its current home.
Now that Q1 2017 is in the books, here is list of the other major deals of the quarter:
- PayPal agreed to acquire TIO Networks for $233m
- Axway announced its acquisition of Syncplicity
- FactSet Acquires BISAM for $205 million
- Funding Circle raised $100m in its sixth round of funding
- 35% of Avaloq acquired by Warburg Pincus for circa $350m
- Prepaid Financial Services acquires Spectre Technologies
- Klarna agreed to acquire BillPay for a reported £60m
- Temenos has agreed to acquire Rubik for $55m
- MYOB egreed to acquire Paycorp for AUD48m
- VISA acquires CardinalCommerce at the end of 2016
- RDM is bought by Deluxe for C$129 million