Thursday , December 8, 2022

Payments Deals Dominate 2019’s Fintech M&A

Payments companies drove merger-and-acquisition activity in the financial-technology sector in 2019’s first nine months, according to a new analysis.

Payments firms were involved in four of the top 10 deals tracked by New York City-based investment bank Berkery Noyes Securities LLC. The value of the payments mergers totaled $94.1 billion, or 72% of the $130.9 billion total valuation of the 10 deals.

Four of this year’s mergers were valued at more than $20 billion, compared with none in 2018, and three of them involved payment processors. The $42.9 billion July acquisition of processor Worldpay Inc. by Fidelity National Information Services Inc. (FIS) topped the list. In third place was Global Payments Inc.’s $26.1 billion buyout of Total System Services Inc. (TSYS) in September. The No. 4 deal was Fiserv Inc.’s $22 billion July acquisition of leading processor First Data Corp.

Mastercard Inc.’s planned acquisition of a major part of Danish processor Nets Group’s operations, announced in August and expected to close next year, is valued at $3.19 billion and ranked sixth. “The most active acquirer year-to-date was Mastercard with five acquisitions,” the report says.

Two of Mastercard’s acquisitions occurred in the third quarter, Nets and bill-pay platform provider Transactis Inc. 

Several of the other Top 10 mergers involved insurance companies. In all, Berkery Noyes tracked 436 deals in 2019’s first three quarters, up nearly 14% from 384 in the same period last year. The total value of the transactions more than tripled to $151.3 billion from last year’s $42.5 billion. The median revenue multiple to enterprise value was 3.4 times compared with 2.9 times in 2018.

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