Observations on Key Fintech Trends

  • The financial technology market continues to attract strong interest from financial investors and strategic acquirers alike, with 750+ M&A transactions completed in 2018 globally
  • Technology companies are increasingly seeking to integrate billing and payments directly into their solutions to both improve end-user experience and to capture incremental economics from financial management and payment processing
  • Payment processors are positioning for market share in an expanding global opportunity, and continue to seek opportunities to differentiate their solutions as payments continue to migrate online and into industry-specific software driven environments
  • Corporations globally are eager to optimize B2B transactions and are investing in cloud-based software solutions that improve procurement, supply chain, and settlement activities, as well as working capital exchanges that streamline corporate finance functions
  • The banking and insurance industries are undergoing significant transformation as financial institutions adopt software solutions to defend against competitive unbundled offerings, improve operational workflows, and enhance client experience across all business lines
  • Consumer adoption of digital and mobile payment solutions has accelerated globally as the proliferation of smartphones, digital currency, and mobile wallets make online transaction increasingly frictionless, secure, and convenient

Financial Technology Taxonomy

Enterprise and Commercialuntitled_274.png

Solutions focused on supporting B2C and B2B payments and financial activity, and serving the financial needs of enterprises of all sizes

  • Payments
  • B2B Transactions
  • Financial Software

Select Market Participants

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Solutions focused on serving the specific operational and compliance needs of banks, insurance companies, and asset managers

  • Banking
  • Insurance
  • Asset Mgmt. / Trading

Select Market Participants

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Consumeruntitled_276.png

Solutions focused on delivering improved financial and payment experiences, personal wealth management, and access to consumer loans

  • Payments
  • Personal Finance
  • Investing

Select Market Participants

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Select Recent HW Financial Technology Transactions

screen_shot_2019-01-22_at_4.37.08_pm.pngProvider of eLearning, workforce management, and compliance solutions to enterprises and professionals across financial services, healthcare, and real estate

 

 

screen_shot_2019-01-22_at_4.37.52_pm.pngProvider of mental and behavioral health practice management, revenue cycle management, billings, and integrated payment processing solutions

 

 

screen_shot_2019-01-22_at_4.38.54_pm.pngProvider of integrated software, data and analytics solutions to the global energy market including financial services, capital markets, and trading and risk professionals

 

 

screen_shot_2019-01-22_at_4.40.19_pm.pngProvider of member management software and payment processing solutions for non-profit organizations, camps, and sports leagues

 

 

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Provider of integrated SaaS civic engagement and payment solutions for government entities

 

 

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Provider of integrated SaaS, insurance, and payments solutions for residential and commercial property managers

 

 

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Provider of SaaS solutions that automate data collection, bookkeeping, and accounting processes for SMBs

 

 

screen_shot_2019-01-22_at_4.43.39_pm.pngProvider of youth sports management software and integrated payments solutions

 

 

 

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Provider of integrated payments and member management solutions for faith-based and non-profit organizations

 

 

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Provider of integrated SaaS and payment solutions for health clubs and fitness centers

Case Study: OnCourse Learning

HW’s TMT Group advised OnCourse Learning on its acquisition by Bertelsmann.

screen_shot_2019-01-22_at_4.18.03_pm.pngCompany Overview

  • OnCourse Learning is a leading, global provider of eLearning, workforce management, and compliance solutions to enterprises and professionals across three high growth, highly regulated markets: financial services, healthcare, and real estate.
  • OnCourse Learning’s financial services business provides a comprehensive suite of compliance and training solutions, including a robust content library related to financial regulation, anti-money laundering, know your customer (KYC), professional skills, and commercial and consumer lending, among other areas.
  • OnCourse Learning serves diverse financial services industry participants, including banks, credit unions, broker dealers, mortgage lenders, and insurance carriers, and has established relationships with nearly every State Banking Association in the US.

Relevant Sub-Sectors

  • SaaS
  • Compliance
  • EdTech
  • Data & Analytics
  • HCIT
  • Fintech

Enterprise & Commercial Market Observations1

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Institutional & Consumer Market Observations1

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Select Financial Technology M&A Transactions1

screen_shot_2019-01-23_at_2.36.44_pm.pngVista’s Pending Take Private Acquisition of Mindbody

  • Mindbody is a provider of cloud-based business management software and payments platform for health and wellness facilities, including fitness centers, yoga studios, and spas
  • Mindbody, which went public in June of 2015, serves over 372,000 wellness practitioners serving roughly 41 million consumers across 100 countries around the world
  • Vista’s take private represents a 68% premium to Mindbody’s stock price prior to the announcement, and will enable the company to accelerate growth through investment in new products and services

screen_shot_2019-01-23_at_2.37.58_pm.pngNCR’s Acquisition of JetPay

  • JetPay is a provider of payment software and services, including debit and credit card processing, human capital management and payroll, to enterprise customers in the US
  • JetPay provides payment processing solutions to nearly 100,000 merchants and generated $76.0 million in revenue in 2017 from customers across a diverse array of industries
  • NCR’s acquisition represents a strategic milestone as it is the company’s first foray into payment processing software, enabling the company to create an end-to-end integrated payment platform for its commercial customers that utilize its POS hardware

screen_shot_2019-01-23_at_2.38.54_pm.pngSS&C’s Acquisition of Intralinks

  • Intralinks is a leading provider of a digital information sharing, reporting, and investor communication platform that serves the global banking and capital markets sectors
  • Intralinks serves greater than 99% of the Global Fortune 1000 and has facilitated nearly $35 trillion worth of transactions through its platform, and generated $303 million in revenue and $115 million in adjusted EBITDA in 2017
  • SS&C’s take-private acquisition of Intralinks strengthens its data sharing and collaboration technology capabilities and expands its wallet share across its existing customer base

screen_shot_2019-01-23_at_4.32.08_pm.pngPayPal’s Acquisition of HyperWallet

  • HyperWallet is a provider of enterprise payment and remittance technology that enables organizations to make and collect mass payments across the globe
  • HyperWallet’s payout platform enables ecommerce platforms and enterprises to manage, track, and distribute payments to over 200 countries without requiring a regional bank account
  • PayPal’s acquisition broadens its customer reach and extends its capabilities within ecommerce by providing frictionless payment experiences for digital marketplace buyers and sellers

screen_shot_2019-01-23_at_4.33.31_pm.pngThoma Bravo’s Acquisition of Apttus

  • Apttus is a leading provider of cloud-based software and artificial intelligence solutions for quote-to-cash and source-to-pay, enabling organizations to better manage B2B relationships
  • Apttus serves enterprise customers across a diverse range of industries, including technology, manufacturing, healthcare, and financial services, many of which are sector leaders within the Global 1000
  • Thoma Bravo will appoint an operating partner as Executive Chairman, and will work closely with the management team to provide operational expertise, accelerate growth, and enhance speed to market of new offerings

Financial Technology Acquisition Activity

Most Active Strategic Acquirers of Fintech Assets by Volume4

  • The 10 most active strategic fintech consolidators have acquired over 184 companies since 2012.
  • This group completed 26 fintech acquisitions in 2018, matching their mark from 2017.
  • Established vendors are aiming to augment their capabilities, limit disintermediation, and drive internal operational efficiencies.screen_shot_2019-01-23_at_4.36.01_pm.png

Global Financial Software M&A Activity

  • Across financial software, there were 167 M&A transactions closed in Q4 2018, with private equity transactions representing 32% of total deal volume.
  • Strategic and financial buyers were highly acquisitive in 2018—particularly in 1H’18—as their appetite for innovative financial software solutions persists.screen_shot_2019-01-23_at_4.37.29_pm_0.png

Enterprise & Commercial Solutions – Landscape

Representative Enterprise & Commercial Solution Providers

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Vertical Specific Payments Solutions – Landscape

Representative Vertically-Focused Integrated SaaS and Payments Providers

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Note: Logos are representative of vertical participants and not comprehensive.

Enterprise & Commercial Solutions – Trading Comparables

Valuation1

As of December 31st, 2018 ($ in millions)

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Enterprise & Commercial Solutions – Transaction Activity

Select Recent M&A Transactions1

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Select Recent Private Placement Transactions4  

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Institutional Solutions – Landscape

Representative Institutional Solution Providers

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Institutional Solutions – Trading Comparables

Valuation1

As of December 31st, 2018 ($ in millions)

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Institutional Solutions – Transaction Activity

Select Recent M&A Transactions1

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Select Recent Private Placement Transactions4 

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Consumer Solutions – Landscape

Representative Consumer Solution Providers

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Consumer Solutions – Trading Comparables

Valuation1

As of December 31st, 2018 ($ in millions)

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Consumer Solutions – Transaction Activity

Select Recent M&A Transactions1

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Select Recent Private Placement Transactions4

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M&A Advisor of Choice for Leading TMT Companies

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1. FactSet

2. PNC Capital Markets

3. S&P LCD stats

4. PitchBook

 

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