The first half of 2018 witnessed 141 Fintech M&A deals with a total disclosed transaction value of $39.3bn.
According to the latest Fintech M&A Market Report from international technology mergers and acquisitions advisers, Hampleton Partners, total first half deals are up 26% from the prior half year.
The surge in transaction values is due to increasing acceptance of digital banking, payments and financial data services.
The number of deals also increased, up 8% from the second half of 2017.
Investments by private equity investors are up 30% compared with the same period two years ago, excluding the string of transactions by private equity-backed companies.
Machine learning, financial media, data solutions and payment processing companies fuel the biggest deals for the first half.
Blockchain, insurtech and Europe’s Revised Payment Service Directive (PSD2) is expected to drive the next wave of fintech M&A.
Digital payments M&A on the rise
Digital payment and transaction processing deals account for two of the five biggest deals and continue to deliver high multiples. Paypal’s all-cash acquisition of payments provider, iZettle, at 19x trailing revenues resulted in a deal worth $2.2bn.
Another landmark deal was Worldline’s $2.75bn deal to snap up SIX group.
Jo Goodson, MD, Hampleton Partners, said:“Fintech M&A activity is coming of age. After the initial surge in somewhat random deal-making, corporate and financial buyers alike are chasing larger and more targeted investments. These can help streamline back-office operations, improve the digital customer experience and cut costs.”
Largest H118 Fintech M&A deals
$17bn, Jan 2018, Blackstone acquires Thomson Reuters at 5.2x EV/S;
$5.2bn, Mar 2018, CME Group acquires NEX Group 7.0 x EV/S;
$5.06bn,Jan 2018, SS&C Technologies acquires DST Systems at 2.7 v EV/S;
$2.75bn, May 2018, Worldine acquires SIX Group;
$2.2bn, May 2018, PayPal acquires iZettle at 19.0 x EV/S
Source: Douglas Blakey