financial technology sector review€¦ · share while also capturing higher proportions of...
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Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan.
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www.harriswilliams.de
FINANCIAL TECHNOLOGY SECTOR REVIEWTECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
PAGE |
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
1
has been
recapitalized by
Fintech
Healthcare IT
HARRIS WILLIAMS & CO. OVERVIEW
KEY CONTACTS
FINTECH
Tyler DewingDirectortdewing@harriswilliams.com+1 (617) 654-2133
Scott ReinigVice Presidentsreinig@harriswilliams.com+1 (617) 654-2113
UNITED STATES
Jeff BistrongManaging Directorjbistrong@harriswilliams.com+1 (617) 654-2102
Mike WilkinsManaging Directormwilkins@harriswilliams.com+1 (415) 217-3411
Sam HendlerManaging Directorshendler@harriswilliams.com+1 (617) 654-2117
EUROPE
Thierry MonjauzeManaging Directortmonjauze@harriswilliams.com+44 (0) 20 7518 8901
wwwwww.harrisw.harriswilliilliaammss.de
HARRIS WILLIAMS & CO. (HW&CO.) GLOBAL ADVISORY PLATFORM
SOFTWARE / SAAS
Enterprise Software
Data and Analytics
Infrastructure and
Security Software
IT and Tech-Enabled
Services
Data Center and
Managed Services
INTERNET & DIGITAL MEDIA
Online Marketing
Consumer Internet
Digital Media and Content
eCommerce and Retail
Mobile
HW&CO. TECHNOLOGY, MEDIA & TELECOM (TMT) GROUP FOCUS AREAS
SELECT RECENT HW&CO. TMT TRANSACTIONS
TMT VERTICAL FOCUS AREAS
25+ year history with over 120closed transactions in the last24 months
Over 260 professionals acrosseight offices in the U.S. andEurope
Strategic relationships in Indiaand China
10 industry groups
KEY FACTS
HW&Co. Office
Network Office
Education Technology
Engineering SolutionsSoftware
Public Sector and Non-Profit
Supply Chain, Transportation,and Logistics
Professional Services
Human CapitalManagement
2017
has received a minority
investment fromhas been acquired by has been acquired by has been acquired by has acquired
has received a majority
Investment from
has received
a growth
investment from
has been acquired byhas received a majority
investment from
has received a majority
investment fromhas been acquired by
PAGE | 2
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
HW&CO. FINANCIAL TECHNOLOGY (FINTECH) TAXONOMY
HW&Co.’s fintech practice is focused on companies with software and technology core to their value proposition and market position.
SELECT HW&CO. FINANCIAL TECHNOLOGY TRANSACTIONS
ENTERPRISE & COMMERCIAL INSTITUTIONAL
SELECT MARKET PARTICIPANTS SELECT MARKET PARTICIPANTS SELECT MARKET PARTICIPANTS
KEY FOCUS AREAS
PAYMENTS
B2B TRANSACTIONS
FINANCIAL SOFTWARE
Solutions focused on supporting B2B payments and financial activity, and serving the financial needs
of enterprises of all sizes
KEY FOCUS AREAS
PEER TO PEER
PERSONAL FINANCE
Solutions focused on delivering improved financial and payment experiences, personal wealth
management, and access to consumer loans
Solutions focused on serving the specific operational and compliance needs of banks, insurance companies, and asset managers
KEY FOCUS AREAS
BANKING
INSURANCE
ASSET MANAGEMENT
TRADING
CONSUMER
Data-driven marketing
and analytics tools to
the automotive industryhas been
acquired by
SaaS solutions that
manage the process of
claim to payment for
physicians has been
acquired by
SaaS solutions that
enable grants, giving,
and financial
management for the
non-profit community
has been
acquired by
SaaS-based employee
benefits
management
technology providerhas been
acquired by
Property valuation, tax
assessment, revenue,
billing, and document
management software
solutions
has been
acquired by
Integrated payments
and member
management solutions
for faith-based and
non-profit organizations
has received a majority
investment from
Integrated SaaS and
payment solutions for
health clubs and fitness
centershas been
recapitalized by
Youth sports
management software
and integrated
payments solutionshas received a majority
investment from
SaaS solutions that
automate data
collection,
bookkeeping, and
accounting processes
for SMBs
has received a minority
investment from
HW&Co. will be at Money 20/20 in Las
Vegas from October 22nd-25th.
Please contact
TMT_Fintech@harriswilliams.com to
schedule a meeting.
EVENTS
PAGE | 3
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
RISK
MGMT
UNDER-
WRITING
CORE
SYSTEMS
HARRIS WILLIAMS & CO. FINTECH ECOSYSTEM
P2P
PAYMENTS
ACQUIRER / PROCESSOR
PAYMENT
NETWORK
P2P LENDING
CREDIT
MONITORING
Form of Payment
Goods / Services
MOBILE
WALLETC
ap
ture
Pa
ym
en
t
Info
rma
tionS
ett
lem
en
t
ACCOUNTINGMARKETPLACE
LENDING
B2B
PAYMENTS
GLOBAL
REMITTANCE
SUPPLY CHAIN
&
PROCUREMENT
SUBSCRIPTION
BILLING
CROWD
FUNDING
Authorization
Tran
sac
tion
Da
ta
Route
to Network
CORE
SYSTEMSLENDING BANK
INSURANCE
COMPLIANCE
TRADING
UNDER-
WRITING
ASSET
MANAGEMENT
& TRADING
WEALTH
MGMT
HR, PAYROLL,
& BENEFITS
CONSUMER
Au
the
ntic
atio
n
PERSONAL
FINANCIAL
MGMT
DA
TA&
AN
ALY
TICS
DIS
TRIB
UTE
DLED
GER
TEC
HN
OLO
GY
COMMERCIAL
BUSINESS
* Dotted lines represent the typical flow of payment transactions.
Solutions focused on supporting B2B payments and financial activity, and serving the financial needs of enterprises of all sizes
Solutions focused on delivering improved financial and payment experiences, personal wealth
management, and access to consumer loans
Solutions focused on serving the specific operational and compliance needs of
banks, insurance companies, and asset managers
CONSUMER PLATFORMS INSTITUTIONAL PLATFORMS ENTERPRISE & COMMERCIAL PLATFORMS
PAGE | 4
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
CASE STUDY: RECEIPT BANK
HW&CO. DEAL CONTACTS
HW&Co.’s TMT Group advised Receipt Bank on the minority investment from Insight VenturePartners.
Thierry Monjauze
Managing Director
tmonjauze@harriswilliams.com
Office: +44 (207) 518-8901
Sylvain Noblet
Vice President
snoblet@harriswilliams.com
Office: +44 (207) 518-8917
Jonathan Organ
Director
jorgan@harriswilliams.com
Office: +44 (207) 518-8909
ENTERPRISE & COMMERCIAL
RELEVANT SECTORS:
SaaS
Data & Analytics
AI/ Machine
Learning
Fintech
Receipt Bank is an award-winning automatedbookkeeping SaaS platform for over 3,600 SMBsand accounting partners across EMEA, Australia,and North America.
Receipt Bank is recognized for its best-in-classdata extraction technology and unrivaledaccuracy, and has built one of the largest AIteams in the industry focused on bookkeepingautomation.
The minority growth investment from InsightVenture Partners positions the Company toaccelerate growth through global expansion andnew product development as it continues toreinforce its market-leading position.
a portfolio company of
has received a
minority investment from
PAGE | 5
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
7.5x 20.2x 18.5x
Enterprise Value /
LTM Rev. LTM EBITDA 17E EBITDA
0.0x
5.0x
10.0x
15.0x
20.0x
0.0x
5.0x
10.0x
15.0x
20.0x
0.0x
2.5x
5.0x
7.5x
10.0x
0.0x
10.0x
20.0x
30.0x
40.0x
Payroll & Benefits
Valuations
Observations
ENTERPRISE & COMMERCIAL MARKET OBSERVATIONS1
Payment Networks Payment Processing B2B Transactions
Valuations
Observations
Valuations
Observations
Valuations
Observations
Data & Compliance
Valuations
Observations
TEV / LTM Revenue TEV / LTM EBITDA TEV / LTM EBITDA TEV / LTM EBITDA TEV / LTM EBITDA
Transaction Spotlight
In The NewsIn The News In The News In The News In The News
May 30, 2017
Enterprise Value: $625M
Transaction Spotlight Transaction Spotlight Transaction Spotlight Transaction Spotlight
June 28, 2017
Enterprise Value: N/A
May 1, 2017
Enterprise Value: $675M
May 15, 2017
Enterprise Value: $3.3B
June 6, 2017
Enterprise Value: $560M
With comprehensive solution offerings
across compliance, benefits, and
wellness gaining prevalence, the
market continues to experience
consolidation with companies
broadening offerings and moving into
adjacent solution categories
Companies, especially SMBs and
vertically-focused platforms, continue
to outsource HR functions using
integrated cloud-based SaaS to
manage complex human capital
management needs
Networks continue to benefit from
growing non-cash transaction volumes
on a global basis, particularly in mobile
and e-commerce environments
Focus remains on expanding the
breadth of payment networks while
reducing payment friction in order to
drive convenience while ensuring
transaction safety and security
The role of traditional payment
processors and merchant acquirers is
evolving rapidly as transactions
become increasingly digitized and
companies seek to deliver improved
omni-channel experiences with
minimal payment friction
Software vendors are increasingly
securing merchant relationships at the
expense of traditional processors, with
integrated software / payment vendors
able to expand distribution and market
share while also capturing higher
proportions of transaction fees
Growing digitization of payment
activities in an omni-channel
environment and technologies that
enable more efficient and secure
transactions, including on a cross-
border basis, continue to drive the
development of B2B payment
applications
B2B investment is expected to outpace
the consumer payment market in the
mid-term given the significant white
space opportunity and unique pain
points related to the lack of efficient
payment infrastructure globally
Executives are increasingly leveraging
analytics-driven data solutions to make
decision-making processes more cost-
efficient, flexible, and timely
Data and compliance companies are
developing solutions that leverage
existing systems to produce data and
customized reporting in an efficient
manner without the risk of replacing
legacy platforms
Visa Study: Consumers want new, IoT ways to pay
Integrated payments driving Airbnb’s meteoric rise
Fighting fraud with behavioral biometrics
Workers demanding improved payroll accuracy
Why businesses have been to slow to digitize, and what’s changing
Key Public CompsKey Public Comps Key Public Comps Key Public Comps Key Public Comps
Enterprise Value /
LTM Rev. LTM EBITDA 17E EBITDA
Enterprise Value /
LTM Rev. LTM EBITDA 17E EBITDA
Enterprise Value /
LTM Rev. LTM EBITDA 17E EBITDA
Enterprise Value /
LTM Rev. LTM EBITDA 17E EBITDA
4.5x 14.5x 13.7x 4.6x 15.0x 10.3x 5.6x 14.6x 14.1x 6.4x 24.1x 16.3x
0.0x
5.0x
10.0x
15.0x
20.0x
PAGE | 6
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
0.0x
2.5x
5.0x
7.5x
10.0x
0.0x
1.0x
2.0x
3.0x
4.0x
0.0x
5.0x
10.0x
15.0x
20.0x
0.0x
7.5x
15.0x
22.5x
30.0x
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
Observations Observations Observations Observations Observations
INSTITUTIONAL AND CONSUMER MARKET OBSERVATIONS1
Banking Insurance AMT P2P Transfers Marketplace Lending
Transaction Spotlight Transaction Spotlight Transaction Spotlight Transaction Spotlight Transaction Spotlight
In The News In The NewsIn The News In The News In The News
May 30, 2017
Enterprise Value: N/A
April 6, 2017
Enterprise Value: $50M
May 17, 2017
Enterprise Value: N/A
May 24, 2017
Enterprise Value: $123M
April 13, 2017
Capital Raise: $30M
Valuations
TEV / LTM EBITDA
Valuations
TEV / LTM EBITDA
Valuations
TEV / LTM EBITDA
Valuations
TEV / LTM Revenue
Valuations
Price / Book Value
Banks continue to face intense
competition from unbundled
consumer-facing financial services,
driving increased focus and investment
on applications that meet the
demands of customers in an
omnipresent digital environment
Banks are increasingly adopting,
developing, and/or acquiring software
applications to establish more agile
core operations in an effort to reduce
costs, meet stringent regulatory and
reporting requirements, and maintain
their competitive advantage
Insurance companies continue to
migrate from modular application
vendors to full-service suite software
providers
Insurers are increasingly leveraging
data and analytics to better underwrite
risk through improved insight into
customer behavior, and automation to
more efficiently process claims
New technology platforms focused on
user experience continue to drive
customer acquisition costs down and
disrupt broker-driven business models
Asset managers are increasingly
adopting software applications to
modernize service offerings, enhance
client engagement through better
communication tools, and attract
digitally-focused customers
Traditional AMT providers continue to
migrate from traditionally offline
business models to online platforms to
compete with digital-first applications
(e.g. roboadvisors) and avoid further
technology-driven disintermediation
Peer-to-peer transfer volume continues
to grow considerably leading to a
proliferation of providers that now
includes financial institutions, traditional
payment companies, and social media
platforms
As demand for peer-to-peer transfers
continues to see strong momentum,
platforms have heightened their focus
on delivering frictionless and secure
user experiences to compete for
market share
The marketplace lending industry
experienced a reset as growth was
curtailed due to limited investor
appetite, questions about platform
scalability and sustainability, and
uncertainty in credit quality consistency
P2P lending platforms continue to face
competition from traditional lenders
with low costs of capital, but could
benefit from partnerships to fuel future
growth
Major shifts in the US alternative lending market
U.S. banking industry’s answer to Venmo has now arrived
Empower aiming to replace your mobile banking application
Insurance customers need to get used to talking to machines
Building trading algorithms with no coding required
Key Public CompsKey Public Comps Key Public Comps Key Public Comps Key Public Comps
Enterprise Value /
LTM Rev. LTM EBITDA 17E EBITDA
Enterprise Value /
LTM Rev. LTM EBITDA 17E EBITDA
Enterprise Value /
LTM Rev. LTM EBITDA 17E EBITDA
Enterprise Value /
LTM Rev. LTM EBITDA 17E EBITDA
Price /
Q1 '17 Book Value 17E Book Value
5.7x 16.5x 14.9x 6.2x 18.5x 19.3x 5.1x 13.8x 12.7x 3.8x 18.0x 13.8x 1.9x 1.7x
PAGE |
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
7
First Data’s acquisition of CardConnect
CardConnect is a provider of a full-service payment platform for small and medium-sized businesses.
As an existing First Data distribution partner, CardConnect processes approximately $26 billion of payment
volume annually from over 65,000 merchant customers.
The acquisition will allow First Data to bring one of its largest distribution partners into its own payment
network while also incorporating CardConnect’s innovative distribution, integrated payment, and enterprise
solution offerings.
Ent. Value: $625MRevenue: $746M
EV / Revenue: 0.8xEV / EBITDA: NM
Announced: May 29, 2017
SELECT FINTECH M&A TRANSACTIONS – 2Q 20171
SUBSECTOR
DATA &
ANALYTICS
B2B
TRANSACTIONS
PAYMENT
PROCESSING
Vista Equity Partners acquires a majority stake in PayLease
PayLease is a provider of payments and billing solutions for the property management and HOA industry.
The Company serves more than 4,500 property management companies worldwide through its online
payments, residential billing, and utility expense management solutions.
Vista’s investment will fuel continued growth through further innovation of PayLease’s products and services
for the broader property management industry.
Ent. Value: NARevenue: NA
EV / Revenue: NAEV / EBITDA: NA
Announced: June 28, 2017
GTCR’s acquisition of Sage Group’s North American payments business
Sage is a U.K. based provider of accounting, payroll, and payment processing services.
Sage Payment Solutions (“SPS”), Sage’s North American payments unit, offers credit card, ACH, check, gift,
and loyalty card-processing services to small and medium-sized businesses.
Following the carve-out, GTCR expects to accelerate investment in SPS’s technology offering to deliver
additional modules to both existing and new customers and partners, while also supporting expansion
through acquisitions and partnerships across the integrated payment ecosystem.
Announced: June 2, 2017
Ent. Value: $260MRevenue: $168M
EV / Revenue: 1.6xEV / EBITDA: NA
Moody’s’ acquisition of Bureau Van Dijk
Bureau van Dijk is a global provider of business intelligence and company information.
The Company aggregates and distributes financial information and private company datasets of more than
220 million companies worldwide and has partnerships with 160 other independent information providers.
The acquisition will provide significant opportunities for Moody’s to offer complementary products, create
new risk solutions, and extend its reach to new market segments.Ent. Value: $3.3BRevenue: $282M
EV / Revenue: 11.8xEV / EBITDA: 23.1x
Announced: May 15, 2017
Fleetcor’s acquisition of Cambridge Global Payments
Cambridge Global Payments is a leading provider of international B2B payment technology.
Cambridge currently processes over $20 billion in B2B cross-border payments annually, supporting 13,000
customers in making international payments to suppliers and employees in over 140 different currencies.
The acquisition will expand Fleetcor’s domestic accounts payable payments business internationally while
providing Cambridge customers with access to complementary corporate payments products.Ent. Value: $675MRevenue: NA
EV / Revenue: NAEV / EBITDA: NA
Announced: May 1, 2017
REAL ESTATE &
LEASING
PAYMENT
PROCESSING
PAGE |
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
8
1
12
4
1
4
7
12
Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17
FINTECH ACQUISITION ACTIVITY
MOST ACTIVE STRATEGIC ACQUIRERS OF FINTECH ASSETS BY VOLUME4
GLOBAL FINANCIAL SOFTWARE M&A ACTIVITY4
The 10 most active strategic fintechconsolidators combined for over 150acquisitions since 2012.
YTD 2017 this group has completed17 acquisitions which is on pace with2016 activity.
It is expected that Global Payments(Heartland) and IHS Markit (IHS) maybe more active in 2H’17 with theirrespective large acquisitionintegrations well in hand.
Across financial software, therewere 110 M&A transactions closedin 2Q’17, with buyout and growthequity control transactionsrepresenting 29% of total dealvolume.
Strategic acquirers continue todemonstrate strong interest infinancial software, with large,established vendors targeting assetsthat reduce the threat ofdisintermediation, expandtechnology-oriented solutionofferings, and drive internaloperational efficiencies.
43
32
58
32
67
43
81
50
71
32
86
40
86
43
69
53
82
46
63
41
63
35
68
44
78
32
4
1
7
6
2
6
7
3
1
2
5
2
2
4
5
2013
2014
2015
2016
2012
YTD 2017
Private Equity
Strategic
1
2
6
2
2
3
1
2
4
2
3
24
2
2
3
1
2
3
4
11
4
13
22
4
1
1
4
PAGE | 9
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
ENTERPRISE & COMMERCIAL SOLUTIONS – LANDSCAPE
REPRESENTATIVE ENTERPRISE & COMMERCIAL SOLUTION PROVIDERS
Payments Other E&C Financial Software
To receive the latest Financial Technology market
maps, please contact HW&Co. at
TMT_Fintech@harriswilliams.com
PAGE | 10
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
VERTICAL SPECIFIC PAYMENTS SOLUTIONS - LANDSCAPE
REPRESENTATIVE VERTICALLY-FOCUSED INTEGRATED SAAS AND PAYMENTS PROVIDERS
To receive the latest Financial Technology market
maps, please contact HW&Co. at
TMT_Fintech@harriswilliams.com
PAGE | 11
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
Fintech Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Sub-Vertical Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 17E Rev. LTM EBITDA 17E EBITDA Earnings
Automatic Data Processing ADP $45,029 $45,842 97.0% 11.5% 27.5% 6.7% 6.8% 22.7% 3.7x 3.5x 16.2x 16.3x 26.4x
Paychex PAYX $20,323 $20,464 90.3% (4.3%) 35.2% 6.8% 5.6% 43.4% 6.4x 6.3x 14.9x 14.3x 25.8x
Ultimate Software Group ULTI $6,331 $6,242 93.1% (0.1%) 46.5% 24.6% 30.3% 7.9% 7.7x 6.5x 98.0x 26.9x 238.7x
Paylocity Holding PCTY $2,338 $2,327 91.0% 4.6% 108.3% 34.6% 30.6% 8.6% 8.2x 7.0x 95.9x 39.9x 564.8x
WageWorks WAGE $2,220 $2,657 83.5% 12.4% 37.2% 19.8% 25.7% 22.9% 5.5x 4.6x 24.1x 15.5x 98.8x
Thomson Reuters TRI $40,425 $33,288 98.4% 14.5% 27.0% (6.4%) 2.8% 27.5% 3.6x 3.6x 13.1x 12.1x 30.0x
Moody's MCO $25,659 $23,277 98.9% 29.8% 35.1% 9.6% 4.6% 47.4% 6.8x 6.7x 14.4x 14.3x 56.9x
Experian EXPN-GB $22,363 $19,187 92.6% 8.4% 21.1% (4.7%) 8.1% 35.0% 5.2x 4.9x 14.7x 13.9x 21.9x
Equifax EFX $19,362 $16,520 95.4% 7.0% 89.9% 17.1% 9.2% 36.2% 6.0x 5.7x 16.5x 15.5x 31.0x
TransUnion TRU $10,572 $7,888 96.5% 29.5% NA 12.5% 10.1% 35.3% 6.0x 5.7x 17.1x 14.5x 47.6x
Dun & Bradstreet DNB $5,359 $3,990 76.4% (11.2%) (3.3%) 4.5% 5.4% 28.3% 3.1x 3.0x 11.1x 11.1x 45.7x
FleetCor Technologies FLT $16,770 $13,305 81.7% 0.8% 8.6% 13.9% 20.0% 51.8% 8.7x 7.6x 16.7x 13.6x 29.6x
WEX WEX $6,692 $4,472 84.8% 17.6% (1.9%) 28.6% 13.6% 35.2% 6.1x 5.6x 17.2x 13.5x 66.0x
Financial Software Median $16,770 $13,305 92.6% 8.4% 31.3% 12.5% 9.2% 35.0% 6.0x 5.7x 16.5x 14.3x 45.7x
Western Union WU $11,376 $8,977 83.9% (0.7%) 9.6% (0.6%) 1.0% 24.4% 2.1x 2.1x 8.6x 8.8x 41.4x
Open Text Corporation OTEX-CA $10,536 $8,318 89.4% 7.2% 31.2% 16.3% 29.9% 33.2% 5.0x 4.1x 15.0x 11.8x 7.2x
Basware BAS1V-FI $655 $648 97.8% 17.2% (15.4%) 4.6% 9.3% 7.9% 3.9x 3.8x 50.2x NM NA
Cass Information Systems CASS-US $598 $735 87.7% 27.0% 29.5% 5.4% NA 24.7% 4.6x NA 18.8x NA 29.8x
B2B Transactions Median $5,595 $4,526 88.5% 12.2% 19.5% 5.0% 9.3% 24.6% 4.3x 3.8x 16.9x 10.3x 29.8x
Visa V $238,169 $211,234 97.1% 26.4% 75.1% 17.9% 14.2% 69.3% 14.2x 13.0x 20.4x 18.5x 48.3x
Mastercard MA $128,449 $127,999 96.2% 37.9% 60.8% 11.9% 15.2% 58.0% 11.6x 10.6x 20.0x 18.5x 31.7x
American Express AXP $102,024 $75,292 98.7% 38.6% (11.7%) (2.9%) (0.4%) NA 3.0x 3.1x NA NA 15.3x
Discov er Financial Serv ices DFS $35,125 $23,644 83.7% 16.0% (1.1%) 5.9% (6.1%) NA 3.3x 3.6x NA NA 10.6x
First Data Corporation FDC $38,051 $6,823 95.7% 64.4% NA 0.7% 4.7% 22.6% 3.3x 3.2x 14.5x 12.6x 32.5x
Alliance Data Systems ADS $32,845 $14,291 96.4% 31.0% (9.9%) 12.7% 11.8% 24.3% 4.5x 4.2x 18.4x 16.7x 34.0x
Cielo CIEL3-BR $23,304 $20,172 77.0% (15.7%) (38.1%) 11.0% 6.3% 45.0% 6.4x 6.2x 14.2x 13.7x 16.6x
Global Payments GPN $17,747 $13,772 96.6% 26.5% 145.8% NA 14.0% 31.7% 5.6x 5.2x 17.8x 15.7x 64.5x
Vantiv VNTV $15,875 $10,263 95.6% 11.9% 87.4% 16.4% 34.9% 52.3% 9.7x 7.5x 18.6x 15.8x 50.7x
Total System Serv ices TSS $13,585 $10,720 96.1% 9.7% 82.5% 12.1% 7.9% 32.4% 4.2x 4.0x 13.1x 11.6x 32.1x
Euronet Worldwide EEFT $4,541 $4,581 96.8% 26.3% 76.2% 9.9% 12.0% 16.7% 2.3x 2.1x 13.7x 11.4x 27.3x
Paysafe Group PAYS-GB $3,541 $3,219 97.5% 27.7% 56.8% 63.1% 16.4% 28.7% 3.5x 3.2x 12.3x 10.6x 23.8x
Payments Median $28,074 $14,032 96.3% 26.5% 60.8% 11.9% 11.9% 32.1% 4.4x 4.1x 16.1x 14.7x 31.9x
ENTERPRISE & COMMERCIAL SOLUTIONS – TRADING COMPARABLES
VALUATION1
As of June 30, 2017
Payments
Financial Software
Payment
Networks
Payment
Processing
Payroll &
Benefits
Fleet
Payments
Transfer/Remit
eInvoicing,
EDI, RCM
Data &
Compliance
B2B Transactions
($ in millions)
PAGE | 12
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
Announced Date Target/Issuer Buyer Description New Money ($m)
06/21/2017 FloQast Insight Venture Partners, Polaris Partners Provider of cloud-based accounting close management software. $25
05/25/2017 Billtrust Riverwood Capital Provider of SaaS-based payment cycle management solutions. $50
05/23/2017 MRI Software TA Associates Provider of real estate management and financial software serv ices. NA
05/17/2017 Verse Technologies Greycroft Partners Provider of mobile application that allows instananeous peer-to-peer payments. $21
05/16/2017 OpenGov Emerson Collective Provider of cloud-based budgeting, reporting, and open data tools for the public sector. $30
05/10/2017 OpCity LiveOak Ventures Provider of an online real estate referrals platform. $27
05/04/2017 Signifyd Bain Capital Provider of eCommerce fraud and risk prevention serv ices. $56
04/26/2017 Ivalua KKR Provider of online spend management software serv ices. $70
04/24/2017 Nav Technologies Goldman Sachs, Point 72 Ventures Provider of business credit management and analysis tools. $39
03/15/2017 Flow Commerce Bain Capital Provider of cross-border eCommerce sales solutions. $16
03/15/2017 Recurly Greycroft Partners Provider of enterprise subscription billing management software. $3
03/14/2017 ProducePay Menlo Ventures Provider of a financing platform connecting farmers, distributors, and banks. $77
03/08/2017 Veem Kleiner Perkins Provider of international wire transfer serv ices. $24
03/06/2017 CurrencyCloud GoogleVentures Provider of a foreign exchange and remittance platform. $25
03/02/2017 Sensibill Impression Ventures Provider of a receipt management platform. $17
Announced Date Target/Issuer Buyer Description Enterprise Value ($m)
06/28/2017 PayLease Vista Equity Partners Provider of online payment, billing, and utility expense management software. NA
06/28/2017 Banks Sadler American Express Provider of event management and venue search serv ices. NA
06/02/2017 Sage Payment Solutions GTCR Provider of payment processing and merchant acquiring solutions. $260
05/31/2017 Certify K1 Investment Management Provider of cloud-based travel and expense report management serv ices. $100
05/30/2017 CardConnect First Data Provider of electronic transaction processing and management serv ices. $624
05/17/2017 Riskopy Coupa Software Provider of a cash flow optimization platform. NA
05/10/2017 Leeyo Software Zuora Provider of revenue recognition and subscription relationship management software. NA
05/08/2017 OneDigital New Mountain Capital Provider of employee health and benefit cost management tools. $560
05/01/2017 Cambridge Global Payments FleetCor Technologies Provider of integrated cross-border payment and risk management serv ices. $675
04/25/2017 Paymetric Vantiv Provider of SaaS-based transaction management, protection, and integration solutions. NA
04/13/2017 SpeedETab Paymentez Provider of an online ordering and mobile payment platform. NA
04/07/2017 Abila YourMembership.com Provider of fund accounting, nonprofit management, and fundraising serv ices. NA
04/03/2017 RatePAY Bain Capital, Advent International Provider of online trading payment and billing serv ices. NA
04/03/2017 2Checkout.com Avangate Provider of an online and mobile payment processing platform. NA
03/28/2017 Junifer Systems Gentrack Provider of customer information and billing system solutions for utility companies. $55
ENTERPRISE & COMMERCIAL SOLUTIONS – TRANSACTION ACTIVITY
SELECT RECENT M&A TRANSACTIONS1
SELECT RECENT PRIVATE PLACEMENT TRANSACTIONS4
* “NM” indicates transaction value below $1 million.
PAGE | 13
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
INSTITUTIONAL SOLUTIONS – LANDSCAPE
REPRESENTATIVE INSTITUTIONAL SOLUTION PROVIDERS
Asset Management & TradingInsuranceBanking
Multi-Vertical Institutional Solutions
To receive the latest Financial Technology market
maps, please contact HW&Co. at
TMT_Fintech@harriswilliams.com
PAGE | 14
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
RELX REL-GB $50,652 $23,050 97.9% 17.2% 33.6% 2.0% 7.6% 33.7% 5.4x 5.2x 16.2x 14.9x 29.5x
Thomson Reuters TRI-CA $40,425 $33,288 98.4% 14.5% 27.0% (6.4%) 2.8% 27.5% 3.6x 3.6x 13.1x 12.1x 30.0x
Moody's MCO $25,659 $23,277 98.9% 29.8% 35.1% 9.6% 4.6% 47.4% 6.8x 6.7x 14.4x 14.3x 56.9x
MSCI MSCI $10,815 $9,325 94.2% 33.5% 121.2% 7.5% 10.1% 50.0% 9.2x 8.7x 18.4x 17.0x 35.5x
SS&C Technologies SSNC $10,388 $7,832 97.7% 36.8% 69.4% 39.9% 8.4% 35.8% 6.6x 6.2x 18.6x 15.1x 45.7x
FactSet Research Systems FDS $6,938 $6,519 90.5% 2.9% 37.8% 7.3% 11.7% 34.6% 5.9x 5.5x 17.0x 16.2x 19.5x
Dun & Bradstreet DNB $5,359 $3,990 76.4% (11.2%) (3.3%) 4.5% 5.4% 28.3% 3.1x 3.0x 11.1x 11.1x 45.7x
Fair Isaac Corporation FICO $5,007 $4,317 99.1% 23.4% 114.9% 8.7% 5.4% 22.8% 5.4x 5.3x 23.9x 17.7x 34.7x
DST Systems DST $4,419 $3,811 95.9% 6.0% 32.7% (57.6%) 74.6% 27.6% 3.6x 2.2x 13.2x 10.4x 13.6x
Broadridge Financial Solutions BR $10,117 $8,884 96.9% 15.9% 81.2% 31.1% 15.0% 17.4% 2.7x 2.4x 15.4x 13.9x 29.5x
Fidessa group FDSA-GB $1,049 $1,163 85.8% 14.6% (18.9%) (0.8%) 3.7% 26.3% 2.3x 2.3x 8.9x 9.3x 24.8x
Asset Management & Trading Median $10,117 $7,832 96.9% 15.9% 35.1% 7.3% 7.6% 28.3% 5.4x 5.2x 15.4x 14.3x 30.0x
Guidewire Software GWRE $4,619 $5,111 97.7% 11.3% 69.9% 15.9% 25.9% 5.3% 9.7x 8.5x NM 41.1x 490.8x
Ebix EBIX $1,910 $1,700 82.8% 12.5% 268.2% 12.3% 21.6% 36.8% 6.2x 5.5x 16.9x 16.5x 17.8x
Sapiens International SPNS $555 $549 70.0% (4.4%) 40.1% 14.9% 28.0% 12.4% 2.5x 2.1x 20.1x 19.3x 44.8x
Insurance Median $1,910 $1,700 82.8% 11.3% 69.9% 14.9% 25.9% 12.4% 6.2x 5.5x 18.5x 19.3x 44.8x
Fidelity National Information Serv ices FIS $37,350 $28,232 97.8% 15.9% 55.5% 29.0% 3.5% 31.7% 4.0x 3.9x 12.6x 12.2x 43.4x
Fiserv FISV $31,147 $25,982 96.3% 12.5% 99.9% 4.9% 6.7% 33.9% 5.6x 5.4x 16.5x 15.0x 30.5x
Jack Henry & Associates JKHY $8,102 $8,066 97.6% 19.0% 73.2% 7.0% 7.1% 35.7% 5.7x 5.5x 16.1x 15.6x 30.8x
Temenos Group TEMN-CH $6,491 $6,333 94.1% 79.5% 126.6% 13.6% 14.1% 54.0% 10.0x 9.3x 18.6x 25.0x 49.4x
CoreLogic CLGX $5,229 $3,672 98.7% 12.7% 41.5% 19.9% (3.1%) 22.3% 2.7x 2.8x 12.1x 11.2x 40.2x
Oracle Financial Serv ices 532466-IN $4,271 $4,748 90.3% 9.0% 7.9% 5.6% 17.1% 39.2% 6.5x 5.8x 16.5x 14.9x 25.7x
ACI Worldwide ACIW $3,211 $2,641 93.3% 14.7% 15.5% (2.7%) 2.8% 19.4% 3.2x 3.1x 16.4x 13.0x 69.9x
Q2 Holdings QTWO $1,418 $1,513 91.2% 31.9% 154.1% 35.9% 36.4% NM 8.8x 7.3x NM NM NA
Bottomline Technologies EPAY $1,015 $1,040 90.6% 19.3% (16.1%) 1.0% 8.2% 9.1% 2.9x 2.8x 32.4x 12.9x NA
Banking Median $4,750 $4,210 93.7% 15.3% 48.5% 6.3% 6.9% 31.7% 4.8x 4.7x 16.4x 13.0x 40.2x
INSTITUTIONAL SOLUTIONS – TRADING COMPARABLES
VALUATION1
Asset Management & Trading
Insurance
Banking
Core
Systems
Technology &
Underwriting
AMT
Data &
Analytics
Fintech Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Sub-Vertical Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 17E Rev. LTM EBITDA 17E EBITDA Earnings
As of June 30, 2017 ($ in millions)
PAGE | 15
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
Announced Date Target/Issuer Buyer Description New Money ($m)
06/12/2017 Next Insurance Munich Re Provider of an online small business insurance marketplace. $35
06/02/2017 Coverfox Accel Partners Provider of an online insurance marketplace. $15
05/24/2017 R3 Bank of America Merrill Lynch Provider of a distributed ledger operating system for the financial serv ices industry. $107
05/23/2017 Nomis Solutions Accenture Provider of profit-based pricing and profitability management serv ices. $8
05/23/2017 Carpe Data Aquiline Capital Partners Provider of predictive scoring and data products for insurers. $7
05/17/2017 Neighborly 8VC Provider of a crowd funding platform allowing retail investors to access municipal bonds. $26
05/16/2017 Symphony Communication Serv ices BNP Paribas Provider of an open source secure communication and workflow platform. $63
05/15/2017 Algomi Alliance Bernstein Provider of a financial trading platform that connects fixed income professionals. NA
05/10/2017 Kreditech PayU Provider of a credit-scoring platform. $120
05/09/2017 Solovis Edison Partners Provider of asset management software for the analysis of investments. $8
05/09/2017 Broadway Technology Long Ridge Equity Partners Provider of financial trading software and serv ices for fixed income markets. $42
05/05/2017 PolicyGenius Norwest Venture Partners Provider of an online insurance platform for life, disability, renters, and pet insurance. $30
05/05/2017 Ledger Investing Accel Partners Provider of an insurance-linked security marketplace for improved risk transparency. $5
04/06/2017 Trov Guidewire Provider of an on-demand insurance platform. $45
03/29/2017 Shapeshift Earlybird Ventures Provider of an online digital currency exchange designed for blockchain assets. $10
Announced Date Target/Issuer Buyer Description Enterprise Value ($m)
06/28/2017 LoyaltyExpress New Capital Partners Provider of marketing automation and cloud-based CRM solutions for banks. NA
06/27/2017 Cachematrix Holdings BlackRock Provider of SaaS-based cash management and liquidity solutions for financial institutions. NA
05/30/2017 Comergence Compliance Monitoring Optimal Blue Provider of complaince and risk software for mortgage lenders. NA
05/17/2017 OTAS Technologies Liquidnet Provider of a cloud-based platform to provide pre-trade and market analysis of stocks. NA
05/15/2017 Bureau van Dijk Moody's Provider of private company information and corporate ownership data. $3,330
05/10/2017 Ancoa Software Cinnober Financial Technology Provider of surveillance and analytics for exchanges, regulators, and financial institutions. NA
05/09/2017 Matchi Holdings KPMG International Provider of a matchmaking platform to connect institutions with FinTech serv ices. NA
05/03/2017 BrightClaim Genpact Provider of integrated claims solutions to the property and casualty insurance market. NA
05/02/2017 Supernal Software Ncontracts Provider of risk management software for financial institutions. NA
04/12/2017 BeesPath Accenture Provider of an online management platform to deliver secure communications serv ices. NA
04/06/2017 Transactor Global Solutions Open International Provider of configurable insurance software for underwriting agencies and insurers. $50
03/22/2017 Avaloq Group Warburg Pincus Provider of core banking solutions for front, middle, and back office applications. $863
03/20/2017 BI-SAM Technologies FactSet Provider of portfolio analytics solutions for investment strategy evaluation. $205
03/14/2017 RAGE Frameworks Genpact Provider of knowledge-based automation (AI) technology and serv ices. NA
03/13/2017 DH Corp. Vista Equity Partners Provider of global lending software solutions. $3,447
INSTITUTIONAL SOLUTIONS – TRANSACTION ACTIVITY
SELECT RECENT M&A TRANSACTIONS1
SELECT RECENT PRIVATE PLACEMENT TRANSACTIONS4
* “NM” indicates transaction value below $1 million.
PAGE | 16
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
CONSUMER SOLUTIONS – LANDSCAPE
REPRESENTATIVE CONSUMER SOLUTION PROVIDERS
Peer to Peer Personal Finance
To receive the latest Financial Technology market
maps, please contact HW&Co. at
TMT_Fintech@harriswilliams.com
PAGE | 17
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
Intuit INTU $33,438 $34,028 92.4% 19.0% 63.4% 14.2% 8.8% 31.0% 6.6x 6.3x 21.2x 16.3x 38.1x
Apple AAPL $789,209 $750,897 91.9% 50.6% 54.0% (2.3%) 12.5% 31.3% 3.6x 3.4x 11.5x 10.7x 16.8x
Microsoft MSFT $498,326 $532,175 94.6% 34.7% 64.6% 0.7% 19.6% 34.2% 5.7x 5.0x 16.8x 12.6x 30.5x
Amazon.com AMZN $473,527 $462,680 95.2% 35.3% 191.2% 25.7% 29.2% 8.7% 3.3x 2.8x 38.2x 24.5x 182.2x
Facebook FB $412,179 $356,877 96.5% 32.1% 121.8% 53.2% 44.8% 53.9% 13.6x 10.7x 25.2x 17.3x 39.9x
Personal Finance & Mobile Wallet Median $473,527 $462,680 94.6% 34.7% 64.6% 14.2% 19.6% 31.3% 5.7x 5.0x 21.2x 16.3x 38.1x
PayPal PYPL $61,208 $64,472 97.3% 47.0% NA 16.4% 24.4% 20.2% 5.5x 4.8x 27.3x 18.8x 45.5x
Western Union WU $11,376 $8,977 83.9% (0.7%) 9.6% (0.6%) 1.0% 24.4% 2.1x 2.1x 8.6x 8.8x 41.4x
Square SQ $8,036 $5,395 94.0% 159.2% NA 28.3% (41.5%) 0.2% 4.5x 8.8x NM 64.7x NA
Green Dot Corporation GDOT $1,339 $1,917 95.9% 67.6% 97.5% 6.9% 18.4% 14.8% 1.8x 1.6x 12.1x 6.9x 40.6x
LendingClub LC $1,363 $2,225 81.2% 28.1% NA 3.9% (43.4%) NA 1.2x 2.3x NA 25.6x NA
On Deck Capital ONDK $1,020 $338 72.1% (9.5%) NA 23.3% 12.9% NA 3.2x 2.9x NA NM NA
Peer to Peer Median $2,110 $2,225 94.0% 47.0% 15.5% 13.4% 1.6% 17.5% 2.1x 2.3x 12.1x 13.8x 41.0x
CONSUMER SOLUTIONS – TRADING COMPARABLES
VALUATION1
Peer to Peer
Personal Finance & Mobile Wallets
P2P Transfers
Marketplace
Lending
Personal Fin.
Mobile
Wallets
Fintech Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Sub-Vertical Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 17E Rev. LTM EBITDA 17E EBITDA Earnings
As of June 30, 2017 ($ in millions)
PAGE | 18
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
Announced Date Target/Issuer Buyer Description New Money ($m)
06/28/2017 LendUp PayPal Provider of online lending serv ices focused on the middle class. NA
06/01/2017 Zopa Bessemer Venture Partners Provider of a peer-to-peer lending platform. $41
05/18/2017 Paytm SoftBank Group Provider of a mobile and eCommerce platform for bill payment serv ices. $1,400
05/16/2017 LevelUp JP Morgan Provider of a mobile payment network connecting consumers and merchants. $50
05/11/2017 Wealthsimple Power Financial Provider of low-fee, long-term investment management serv ices. $51
04/26/2017 Robinhood New Enterprise Associates Provider of a mobile stock trading application for consumers. $110
04/13/2017 College Ave Student Loans Comcast Ventures Provider of an online student loan platform. $30
04/07/2017 Upgrade Union Square Ventures Provider of an online credit scoring platform. $54
04/03/2017 OpenInvest Andreessen Horowitz Provider of a socially responsible investing platform. $3
03/31/2017 Robinhood DST Provider of a mobile stock trading application for consumers. NA
03/23/2017 Clarity Money RRE Provider of a personal finance assistance application for consumers. $11
03/21/2017 SoFi Silver Lake Provider of an online finance platform for personal and student loans. $453
03/09/2017 Viva Republica Bessemer Venture Partners, Paypal Provider of a financial serv ices mobile platform to simplify payments in Korea. $48
03/08/2017 Easynvest Advent International Provider of an online and mobile technology platform for investment decision making. NA
03/02/2017 Upstart Network Founders Fund, Kleiner Perkins Provider of an online lending marketplace to provide personal loans. $33
Announced Date Target/Issuer Buyer Description Enterprise Value ($m)
05/24/2017 ItzCash Card Ebix Provider of multi-serv ice prepaid cash cards. $154
03/29/2017 GiveForward YouCaring Provider of an online fundraising platform. NA
03/27/2017 Fit Pay NXT-ID Provider of a contactless payments platform for wearables and IoT devices. NA
03/01/2017 OrderAhead Square Provider of a mobile application for on-demand delivery of food. NA
02/22/2017 Tilt.com Airbnb Provider of a social crowdfunding platform. $62
02/01/2017 ZenBanx Holding Social Finance Provider of an international, multi-currency mobile banking platform. $100
01/30/2017 UniRush Green Dot Provider of prepaid debit card solutions. $151
12/13/2016 AFJC Credit Karma Provider of online indiv idual tax filing serv ices. NA
11/20/2016 LifeLock Symantec Provider of theft identity protection serv ices. $2,096
11/18/2016 Cookies Labs Klarna Provider of a mobile application for peer-to-peer payments. NA
11/16/2016 Iron Horse Holdings LendingTree Provider of online credit card comparison, education, monitoring, and management. $130
10/18/2016 KountMoney Lendingkart Provider of data analytics to the P2P personal loan industry. NA
10/13/2016 RoboVest InvestView Provider of online trading and brokerage applications. NA
10/06/2016 Paribus Capital One Provides online consumer banking serv ices. NA
10/03/2016 Boltmade Shopify Provider of consumer centric software for the retail industry. NA
CONSUMER SOLUTIONS – TRANSACTION ACTIVITY
SELECT RECENT M&A TRANSACTIONS1
SELECT RECENT PRIVATE PLACEMENT TRANSACTIONS4
* “NM” indicates transaction value below $1 million.
PAGE | 19
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
SUMMARY OF TECHNOLOGY IPOS
The market for technology IPOs continues togain traction, with six companies listing in 2Q2017. As global indexes continue to reachnew highs on a regular basis, driven largelyby record growth in technology stocks, bothstartups and unicorns alike increasingly viewthe public markets as a viable source ofliquidity.
While a strong backlog of technology IPOsremains, political uncertainty around thenew US administration as well as SNAP’srecent stock performance decline remainkey considerations as companies considerentering the public markets.
MARKET CAP AT IPO (LTM)1 REVENUE GROWTH (1YR PRIOR TO IPO)1OFFERING SIZE AT IPO (LTM)1
RECENT U.S. IPO ACTIVITY (BY OFFERING SIZE)1
19%
48%
33%
< 25% 25 - 75% > 75%
46%
29%
25%
$0-50M $50-500M $500M-$1B $1B+
13%
29%
42%
17%
$0 - 50M $50 - 100M $100 - 250M $250M +
(All tech IPOs over the last 12 months) (All tech IPOs over the last 12 months) (All tech IPOs over the last 12 months)
6
16
13 13
11
18
7
11
5
15
3
8
0
2
9
4
5
6
1Q-13 2Q-13 3Q-13 4Q-13 1Q-14 2Q-14 3Q-14 4Q-14 1Q-15 2Q-15 3Q-15 4Q-15 1Q-16 2Q-16 3Q-16 4Q-16 1Q-17 2Q-17
$0 - 50M $50 - 100M $100 - 250M $250M +
2013 Total: 48 2014 Total: 47 2016 Total: 152015 Total: 31 2017 YTD Total: 11
PAGE | 20
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
(150.0%)
(125.0%)
(100.0%)
(75.0%)
(50.0%)
(25.0%)
0.0%
25.0%
50.0%
75.0%
100.0%
125.0%
150.0%
Circle Size Denotes Revenue ($)
% R
ev
en
ue
Gro
wth
Sto
ck
Pe
rfo
rma
nc
e
KEY PERFORMANCE METRICS FOR RECENT SOFTWARE IPOS1
IPO DATE
OFFER PRICE
OFFERING SIZE ($M)
OFFER TO CURRENT
91.4% 95.2%
109.2%
8.8%
22.6%
62.2%
115.5%
96.8%
5.8%
49.2% 38.9% 37.3%
4.1%
53.5%
16.5%
117.1%
43.2% 33.4% 20.5%
84.3% 115.3%
49.3%
85.7%
17.7% 70.3%
59.4%
86.6%
57.2%
9.1% 31.5%
(150.0%)
(50.0%)
50.0%
150.0%
250.0%
6/22/16 7/28/16 9/15/16 9/22/16 9/29/16 10/5/16 10/27/16 12/15/16 3/9/17 3/16/17 3/24/17 4/6/17 4/27/17 5/25/17 6/7/17
$15.0 $18.0 $12.0 $16.0 $16.0 $18.0 $17.0 $11.0 $14.0 $17.0 $14.0 $17.0 $15.0 $12.0 $11.0
$1,233.0 $503.5 $323.1 $596.6 $1,958.5 $866.0 $838.6 $287.2 $1,240.6 $2,141.9 $662.5 $187.0 $1,921.0 $75.0 $100.2
$150.0 $94.5 $90.0 $96.0 $237.9 $133.2 $146.2 $287.2 $233.3 $221.0 $126.0 $187.0 $225.0 $75.0 $30.8
91.4% 95.2% 109.2% 8.8% 22.6% 62.2% 115.5% 96.8% 5.8% 49.2% 38.9% 37.3% 4.1% 53.5% 16.5%
MARKET CAP AT OFFER ($M)
PAGE | 21
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
28.6%
3.6%
5.2%
7.0%
7.3%
20.4%
27.9%
Other
Food & Beverage
Manufacturing
Chemicals
Healthcare
Services & Leasing
Computers & Electronics
60%
50%
57% 55%
60%
66%
60% 58%
51%
56%
2008 2009 2010 2011 2012 2013 2014 2015 2016 1H'17
4.0x
3.4x
3.8x 3.8x
4.3x
4.7x 4.7x
5.6x
4.5x
3.3x
4.2x 4.3x4.5x
4.8x
5.3x 5.3x 5.3x 5.3x
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H'17
FLD/EBITDA SLD/EBITDA Other Sr Debt/EBITDA Sub Debt/EBITDA
LBO LOAN VOLUME BY INDUSTRY2,3 MEDIAN LBO DEBT PERCENTAGES4
DEBT MARKET OVERVIEW
MIDDLE MARKET LBO LOAN MULTIPLES2,3 MIDDLE MARKET LBO VOLUME BY QUARTER2,3
1H 2017 New Issue LBO Loans Percentage of Total Purchase Price
Median middle market LBO loan multiples in 1H 2017 remained in line with the prior three years at 5.3x leverage.
Middle market LBO loan volume increased to $1.7 billion in 2Q 2017, continuing the upward trend over the last three quarters.
Technology companies have been the largest recipients of LBO loans in 1H 2017, representing 27.9% of new issuance.
Median LBO debt percentages increased to 56% of total purchase price in 1H 2017.
Defined as Issuers with EBITDA of $50 Million or LessDefined as Issuers with EBITDA of $50 Million or Less
$1.2B
$1.6B$1.5B
$1.8B
$1.2B
$1.9B$2.0B
$0.4B
$0.9B
$1.2B
$0.7B
$0.9B
$1.1B
$1.7B
1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17
Institutional Pro Rata
PAGE | 22
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
SELECT HW&CO. TMT TRANSACTIONS
acquired by acquired acquired by
acquired by acquired by recapitalized by acquired byacquired by acquired byacquired by
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Healthcare & Life Sciences
IndustrialsEnergy, Power & Infrastructure
Industrials
PAGE |
Harris Williams & Co. has a broad range of industry expertise, which create powerful opportunities. Our clients benefit form our deep-sector experience, integrated industry intelligence and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website.
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FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
Technology, Media & Telecom
OUR FIRM
23
PAGE | 24
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q2 2017
Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.
Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
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HARRIS WILLIAMS & CO.
1. FactSet.
2. PNC Capital Markets.
3. S&P LCD stats.
4. PitchBook.
5. HW&Co. proprietary information.
SOURCES
DISCLOSURES
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