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Investment banking services are provided by Harris Williams LLC and Solebury Capital LLC, registered broker-dealers and members of FINRA and SIPC, and Harris Williams & Co. Ltd, which is private limited company incorporated under English lawwith its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 7078852). Harris Williams & Co. Ltd is authorized and regulated by the FinancialConduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
www.harriswilliams.com
FINANCIAL TECHNOLOGY SECTOR REVIEWTECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
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FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
1
Financial Technology
Healthcare IT
Human Capital Management
HARRIS WILLIAMS & CO. OVERVIEW
KEY CONTACTS
FINTECH
Tyler Dewing Director [email protected] +1 (617) 654-2133
UNITED STATES
Jeff Bistrong Managing Director [email protected] +1 (617) 654-2102
Mike Wilkins Managing Director [email protected] +1 (415) 217-3411
Sam Hendler Managing Director [email protected] +1 (617) 654-2117
Erik Szyndlar Director [email protected] +1 (415) 217-3418
EUROPE
Thierry MonjauzeManaging Director [email protected] +44 (0) 20 7518 8901
Jonathan OrganDirector [email protected] +44 (0) 20 7518 8909
www.harriswilliams.comwww.harriswilliams.com
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
AdTech and Marketing Solutions
Consumer Internet
Digital Media and Content
eCommerce
Mobile
HW&CO. TECHNOLOGY, MEDIA & TELECOM (TMT) GROUP FOCUS AREAS
Education Technology
Energy, Power, and Infrastructure
Public Sector and Non-Profit
Supply Chain, Transportation, and Logistics
TMT VERTICAL FOCUS AREAS
Over 125 transactions closed in the past 24 months
Approximately 250 professionals across seven offices in the U.S. and Europe
Strategic relationships in India and China
10 industry groups
KEY FACTS
HW&Co. OfficeNetwork Office
Manufacturing
Professional Services
SELECT RECENT HW&CO. TMT TRANSACTIONS
has been recapitalized by
has been acquired by has been acquired by
Baarsma B2C trades as:
has been acquired byhas been acquired by has been acquired byhas been acquired byhas been
recapitalized byhas acquired
has received a majority investment from
has received a majority investment from
has been acquired by
PAGE | 2
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
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
Integrated payments
and member
management solutions
for faith-based and
non-profit organizations
has received a majority
investment from
Property valuation, tax
assessment, revenue,
billing, and document
management software
solutions
has been
acquired by
Data-driven marketing
and analytics tools to
the automotive industryhas been
acquired by
Payment and royalty
management solutions
for the entertainment
industry
has 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 provider
has been
acquired by
Integrated payments
and member
management solutions
for faith-based and
non-profit organizations
has been
recapitalized by
Cost containment and
cost recovery services
for the energy and
power market
has been
acquired by
Integrated SaaS and
payment solutions for
health clubs and fitness
centers
has been
recapitalized by
Mobile-based provider
of pre-paid sightseeing
city passes, museum-
entry passes, and
related services
has been
acquired by
Patient financial
lifecycle solutions and
data for the healthcare
industry
has been
acquired by
Tax preparation,
compliance,
accounting, billing, and
practice management
software solutions
has been
acquired by
Supply chain software
and an EDI payment
network for SMBshas been
acquired by
Medical claims
management and
payment processing
softwarehas acquired
PAGE | 3
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
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 In
form
atio
nSe
ttle
me
nt
ACCOUNTINGMARKETPLACE
LENDING
B2B
PAYMENTS
GLOBAL
REMITTANCE
SUPPLY CHAIN
&
PROCUREMENT
SUBSCRIPTION
BILLING
CROWD
FUNDING
Authorization
Tran
sac
tion
Da
ta
Routeto 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
Note: Dotted lines represent the typical flow of payment transactions.
CONSUMER PLATFORMS
Solutions focused on supporting B2B payments and financial activity, and serving the financial needs of enterprises of all sizes
ENTERPRISE & COMMERCIAL PLATFORMS
Solutions focused on delivering improved financial and payment experiences, personal wealth
management, and access to consumer loans
INSTITUTIONAL PLATFORMS
Solutions focused on serving the specific operational and compliance needs of
banks, insurance companies, and asset managers
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FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
4
CASE STUDY: MINISTRY BRANDS
HW&CO. DEAL CONTACTS
Ministry Brands is the leading provider of an end-to-endSaaS-based technology platform to member-centricorganizations, including faith-based organizations and K-12private education institutions, serving over 60,000customers.
Ministry has demonstrated that integrating paymentplatforms with membership management software (CRM,ERP) can create a true differentiator in the marketplaceand result in significant synergies and growth opportunities.
With the recapitalization from Insight, and havingcompleted over 35 acquisitions historically, Ministry ispositioned as the largest and most active consolidator inthe membership management software and paymentssector.
HW&Co.’s TMT Group advised Genstar Capital and Providence Strategic Growth on the majorityinvestment in Ministry Brands by Insight Venture Partners.
a portfolio company of
and
has received a majority investment from
Date Closed:
12/2/2016
Relevant Sectors:
SaaS
Fintech / Payments
Membership Management
Ministry represents a key client relationship, with HW&Co. advising on the successful recapitalization of the company by Genstar Capital in 2015 before advising on the majority investment from Insight Venture Partners.
KEY RELATIONSHIP
Enterprise Software
Jeff BistrongManaging Director
Office: (617) 654-2102
Tyler DewingDirector
Office: (617) 654-2133
Priyanka NaithaniVice President
Office: (617) 654-2115
Mike WilkinsManaging Director
Office: (415) 217-3411
Scott ReinigVice President
Office: (617) 654-2113
recapitalized bymajority investment
from
ENTERPRISE & COMMERCIAL
PAGE | 5
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
7.3x 18.6x
Enterprise Value /
2016 Revenue 2016 EBITDA
0.0x
10.0x
20.0x
30.0x
40.0x
0.0x
5.0x
10.0x
15.0x
20.0x
0.0x
2.5x
5.0x
7.5x
10.0x
0.0x
5.0x
10.0x
15.0x
20.0x
0.0x
5.0x
10.0x
15.0x
20.0x
Payroll & Benefits
Valuations
Observations
ENTERPRISE & COMMERCIAL MARKET OBSERVATIONS
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
November 11, 2016
Enterprise Value: $425M
Transaction Spotlight Transaction Spotlight Transaction Spotlight Transaction Spotlight
December 1, 2016
Enterprise Value: NA
November 7, 2016
Enterprise Value: NA
October 10, 2016
Enterprise Value: NA
November 1, 2016
Enterprise Value: $235M
Enterprise Value /
2016 Revenue 2016 EBITDA
Enterprise Value /
2016 Revenue 2016 EBITDA
Enterprise Value /
2016 Revenue 2016 EBITDA
Enterprise Value /
2016 Revenue 2016 EBITDA
3.4x 13.4x 6.1x 27.6x2.9x 13.6x 5.2x 13.9x
Payroll and benefits continue to
grow as disparate, people-based
solutions are migrating towards
integrated cloud-based offerings.
Companies are increasingly
focused on broadening offerings,
including moving into adjacent
human capital management
solutions.
Networks continue to benefit
from secular shifts contributing to
growing non-cash transaction
volumes.
Incumbents pursuing partnerships
and acquisitions to expand in
new markets with emphasis on
mobile and e-commerce.
Focus on enhanced security while
maintaining convenience.
Experiencing strong growth as
electronic payments continue to
account for a larger percent of
transactions.
Companies are seeking to
develop fully integrated multi-
channel offerings, including
Payment as a Service solutions,
that can be vertically integrated
into large end markets.
B2B payment platforms continue
to proliferate as electronic
payment volume and global
remittance increases.
Companies continue to shift
invoicing, billing, RCM, and
supply chain management and
procurement functions online,
giving rise to a number of new
solutions and platforms with
increasing integration.
Data and analytics companies
are gaining prominence as more
companies are seeking solutions
to improve decision making and
manage risk.
Companies are developing
solutions that incorporate data,
but continue to face challenges
around effectively accessing and
interpreting expanding data sets.
Good News for Visa and MasterCard,
as Card Spending GrowsPayment Predictions for 2017 Financial Firms Turn to Artificial
Intelligence to Handle Compliance
Overload
Zenefits, a Rocket that fell to Earth,
Tries to Launch Again
Mobile Devices Gain Steam Among
B2B Buyers
Health Benefits Services Business
Key Public CompsKey Public Comps Key Public Comps Key Public Comps Key Public Comps
PAGE | 6
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
Observations Observations Observations Observations Observations
INSTITUTIONAL AND CONSUMER MARKET OBSERVATIONS
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
December 12, 2016
Enterprise Value: NA
December 19, 2016
Enterprise Value: $160M
October 24, 2016
Enterprise Value: $1,300M
December 13, 2016
Enterprise Value: NA
October 18, 2016
Enterprise Value: NA
1.6x4.0x 14.5x
0.0x
1.0x
2.0x
3.0x
0.0x
2.5x
5.0x
7.5x
10.0x
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
Valuations
TEV / LTM EBITDA
Valuations
TEV / LTM EBITDA
Valuations
TEV / LTM EBITDA
Valuations
TEV / LTM Revenue
Valuations
Price / Book Value
Enterprise Value /
2016 Revenue 2016 EBITDA
Enterprise Value /
2016 Revenue 2016 EBITDA
Enterprise Value /
2016 Revenue 2016 EBITDA
Enterprise Value /
2016 Revenue 2016 EBITDA
7.0x 18.6x 4.5x 12.2x 2.3x 14.9x
Price /
2016 Book Value
Core banking systems continue
to evolve in response to
heightened regulations and
reporting requirements, and
increased focus on risk mitigation.
Companies are intent on
improving customer experience
through increased online and
mobile functionality.
Insurance processes continue to
transform in response to the
growing adoption of data and
analytics to improve underwriting
and claims processing.
New platforms are disrupting
traditional broker models,
substantially lowering the cost of
insurance.
Legacy AMT solutions are being
replaced by growing interest in
automated trading and wealth
management solutions.
Companies are under pressure to
transition offline businesses and
are seeking technologies to
expand customer relationships.
Peer-to-peer transfers have
experienced strong growth as
consumers desire real-time and
low-cost payment alternatives.
Companies are focused on
delivering a frictionless user
experience as payment platforms
compete for transaction volume.
Facing disintermediation,
traditional bank vendors have
moved into P2P transfers.
Lenders seeking to standardize
data to facilitate the formation of
a secondary loan market, thus
reducing dependency on short-
term funding models and
improving transparency.
Companies are becoming
vertically specialized as they seek
to appeal to curated groups of
consumers/ investors and simplify
the lending process.
Financial Technology Start-Ups to
Get a License to Bank
Siri can now send money
via PayPal
AI’s impact on the Global Banking
Industry
Investment in Insurance Technology
Balloons
IBM's Blockchain Consortium With
The Seam Deploys 'Hyperledger' For
Cotton Trading
Key Public CompsKey Public Comps Key Public Comps Key Public Comps Key Public Comps
PAGE |
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
7
TRADING, WEALTH, &
RISK MANAGEMENT
VTS and Hightower’s strategic merger
VTS and Hightower provide software solutions to the global commercial real estate industry.
Through the merger, the companies will come together to form the industry’s largest leasing and assetmanagement platform, with a collective customer base of 5+ billion square feet under management.
The combination brings top institutional and local market operators onto one platform for the first time,creating an ecosystem for real-time collaboration and communication amongst industry participants.
Ent. Value: $300M
Revenue: NA
EV / Revenue: NA
EV / EBITDA: NAREAL ESTATE &
LEASING
Announced: November 29, 2016
SELECT FINTECH M&A TRANSACTIONS – 4Q 2016
Guidewire’s acquisition of ISCS
ISCS is a provider of software solutions to the property and casualty insurance industry.
ISCS provides end-to-end insurance processing services to more than 35 insurance organizations writingall property and casualty lines in all 50 states.
The acquisition will enhance Guidewire’s ability to serve those property and casualty insurers that prefera cloud-based, all-in-one system supporting the insurance lifecycle.Ent. Value: $160M
Revenue: NA
EV / Revenue: NA
EV / EBITDA: NA
Announced: December 19, 2016 SUBSECTOR
INSURANCE TECHNOLOGY
& UNDERWRITING
Morningstar’s acquisition of Pitchbook Data
Pitchbook is a provider of information and services on the private capital markets, including venturecapital, private equity, and M&A, serving over 1,800 clients annually.
Following the acquisition, Morningstar plans to cross-sell Pitchbook into it’s existing client base,accentuating Pitchbook’s strong growth trajectory as private markets and private companies are areasof growing investor interest.
Ent. Value: $225M
Revenue: $31M
EV / Revenue: 7.2x
EV / EBITDA: NA
Announced: October 14, 2016
DATA & ANALYTICS
ION Investment Group’s acquisition of Reval
Reval is a provider of cloud-based accounting software for financial institutions.
The Company’s offerings enable enterprises to better manage cash, liquidity and financial risk, and toaccount for and report on complex financial instruments and hedging activities.
The acquisition of Reval substantially increases ION’s footprint in treasury cloud services and augmentsits product portfolio with leading functionality in treasury and risk management and hedge accounting.
Announced: October 6, 2016
Ent. Value: NA
Revenue: NA
EV / Revenue: NA
EV / EBITDA: NA
Vantiv’s acquisition of Moneris Solutions USA
Moneris is a provider of digital and POS payment processing solutions in North America.
Moneris covers more than 350,000 merchant locations and processed approximately $12 billion in U.S.transaction volume in 2015.
The acquisition further accelerates Vantiv's strategic plan to further expand in the high-growthintegrated payments and merchant channels.
Ent. Value: $425M
Revenue: NA
EV / Revenue: NA
EV / EBITDA: NA
PAYMENT
PROCESSING
Announced: November 11, 2016
PAGE | 8
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
42
5 4
1 1 1
42
1 6
5 7
1 2 2
1
17
7
7 2 1
2
64 1
3
6
3
4
2
2 42
2
2
2 2
4
13 1
3 1
2016
2015
2014
2013
2012
277 276
236222
271
203
263246
193 192
3Q '14 4Q '14 1Q '15 2Q '15 3Q '15 4Q '15 1Q '16 2Q '16 3Q '16 4Q '16
FINTECH ACQUISITION ACTIVITY
MOST ACTIVE STRATEGIC ACQUIRERS OF FINTECH ASSETS BY VOLUME
GLOBAL FINTECH M&A ACTIVITY
The 10 most active strategic fintech consolidators combined for over 135 acquisitions since 2012.
During the fourth quarter of 2016, SS&C acquired Conifer Financial Services, Thomson Reuters acquired Redi Holdings, and FleetCoracquired Travelcard.
In 2016 this group completed 19 acquisitions, compared to 25 acquisitions in all of 2015.
There were 192 fintech M&A transactions globally in 4Q’16, which was in line with the prior quarter and down modestly from recent averages.
Interest in fintech acquisitions among strategic acquirers remains strong, with traditional vendors and big banks targeting fintech assets to reduce the rising threat of disintermediation while enabling an evolving mix of technology-oriented solution offerings.
PAGE | 9
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
B2B Transactions
ENTERPRISE & COMMERCIAL SOLUTIONS – LANDSCAPE
REPRESENTATIVE ENTERPRISE & COMMERCIAL SOLUTION PROVIDERS
Payment Processing & Networks Financial Software
Traditional Payment Processors
Payment Networks
Vertical Specific Payments
Corporate / Fleet Payments
Transfers & Remittance
Procurement & Supply Chain
EDI
Bill Payment
Subscription Billing / RCM
Data & Compliance
Real Estate & Leasing
SMB Marketplace Lending
Accounting & Tax
HR / Payroll / Benefits
Payments Other E&C Financial Software
Payment Gateways / ISOsTo receive the latest Enterprise & Commercial fintech market map,
please contact HW&Co. at *[email protected].
PAGE | 10
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
Automatic Data Processing, Inc. ADP $45,986 $46,372 98.9% 21.3% 45.0% 5.5% 7.3% 22.3% 3.9x 3.8x 17.4x 18.0x 30.8x
Paychex, Inc. PAYX 21,885 21,846 97.9% 15.1% 33.7% 7.2% 7.2% 42.8% 7.1x 7.1x 16.7x 16.6x 28.9x
The Ultimate Software Group, Inc. ULTI 5,457 5,288 81.4% (6.7%) 19.0% 20.0% 26.3% 8.9% 7.4x 7.0x 83.1x 29.3x 303.9x
WageWorks, Inc. WAGE 2,127 2,657 96.3% 59.8% 22.0% 3.7% 9.9% 22.2% 6.1x 5.8x 27.6x 19.7x 127.2x
Paylocity Holding Corp. PCTY 1,459 1,541 60.4% (26.0%) NA 33.6% 28.3% 5.1% 5.8x 5.5x 114.2x 43.6x NM
Thomson Reuters Corp. TRI 41,419 32,197 95.8% 15.7% 15.8% (1.7%) (8.3%) 28.1% 3.5x 3.7x 12.3x 13.1x 25.9x
Experian Plc EXPN-GB 21,691 18,373 93.0% 9.9% 5.4% (1.2%) 3.0% 34.1% 4.8x 4.7x 14.0x 13.6x 25.5x
Moody's Corp. MCO 19,883 18,024 85.1% (6.0%) 20.1% 1.2% 2.5% 44.8% 5.6x 5.6x 12.6x 12.3x 20.4x
Equifax, Inc. EFX 17,114 14,159 86.3% 6.2% 71.1% 13.0% 18.0% 33.8% 5.7x 5.4x 16.8x 15.4x 29.9x
TransUnion TRU 8,065 5,658 86.4% 12.2% NA 9.8% 12.5% 32.6% 4.9x 4.8x 15.0x 12.9x 64.4x
Dun & Bradstreet Corp. DNB 5,733 4,463 85.7% 16.7% (1.2%) 3.0% 4.2% 28.6% 3.4x 3.4x 11.9x 11.7x 46.0x
FleetCor Technologies, Inc. FLT 16,819 13,128 80.2% (1.0%) 20.8% 2.6% 7.2% 49.8% 9.6x 9.2x 19.3x 16.3x 32.9x
WEX, Inc. WEX 6,548 4,769 95.3% 26.2% 12.7% 10.0% 18.2% 33.4% 7.0x 6.5x 20.9x 17.7x 58.4x
Financial Software Median $16,819 $13,128 86.4% 12.2% 20.1% 5.5% 7.3% 32.6% 5.7x 5.5x 16.8x 16.3x 31.9x
The Western Union Co. WU $12,593 $10,531 97.6% 21.3% 25.9% (0.7%) 0.3% 24.3% 2.3x 2.3x 9.6x 9.4x 13.2x
MoneyGram International, Inc. MGI 1,732 627 92.8% 88.4% (43.2%) 4.7% 6.1% NA 1.2x 1.1x NM 6.5x 69.5x
Open Text Corp. OTC-CA 8,875 8,090 92.5% 29.5% 34.5% 2.8% 15.9% 34.7% 4.7x 4.6x 13.6x 12.8x 6.7x
Basware Oyj BAS1V-FI 552 551 83.3% (5.6%) 11.0% 2.1% (0.8%) 1.7% 3.4x 3.5x 200.8x NM NA
B2B Transactions Median $5,303 $4,359 92.7% 25.4% 18.5% 2.5% 3.2% 24.3% 2.9x 2.9x 13.6x 9.4x 13.2x
Visa, Inc. V $199,924 $181,365 92.9% 0.6% 40.1% 7.2% 17.5% 69.8% 13.3x 12.7x 19.0x 18.2x 31.8x
Mastercard, Inc. MA 109,306 112,490 94.8% 6.0% 23.6% 9.0% 11.7% 56.8% 10.4x 10.1x 18.3x 17.6x 28.5x
American Express Co. AXP 89,854 67,802 97.8% 6.5% (18.4%) (0.3%) (7.0%) NA 2.6x 2.8x NA NA 13.1x
Discov er Financial Serv ices DFS 43,347 28,432 97.9% 34.4% 28.8% 3.8% (8.8%) NA 4.2x 4.8x NA NA 13.1x
First Data Corp. FDC 34,519 12,994 86.5% (11.4%) NA 1.3% 1.7% 20.9% 3.0x 3.0x 14.2x 12.0x NM
Alliance Data Systems Corp. ADS 30,755 13,198 81.6% (17.4%) (13.1%) 9.6% 12.6% 27.9% 4.4x 4.2x 15.6x 16.3x 24.1x
Cielo SA CIEL3-BR 23,171 19,401 74.0% 21.1% (11.3%) (0.8%) 16.2% 45.4% 7.0x 6.1x 15.4x 13.3x 16.4x
Vantiv , Inc. VNTV 14,890 9,604 99.0% 25.7% 82.8% 10.0% 11.8% 24.6% 4.3x 4.2x 17.4x 16.5x 44.2x
Global Payments, Inc. GPN 14,734 10,668 86.8% 7.6% 113.6% 12.6% 36.8% 26.8% 4.6x 3.8x 17.1x 16.5x 35.8x
Total System Serv ices, Inc. TSS 12,057 9,013 86.7% (1.5%) 47.3% 35.1% 9.5% 24.7% 3.2x 4.0x 13.0x 11.6x 27.5x
Euronet Worldwide, Inc. EEFT 3,771 3,781 85.4% NA 51.4% 7.7% 9.6% 17.0% 2.0x 1.9x 11.6x 10.9x 22.0x
Paysafe Group Plc PAYS-GB 2,625 2,247 71.9% (16.3%) 34.4% (3.2%) 60.6% 26.8% 4.4x 2.7x 16.5x 9.1x 38.2x
Payments Median $26,963 $13,096 86.8% 3.3% 34.4% 7.5% 11.7% 26.8% 4.3x 4.1x 16.1x 14.8x 27.5x
Fintech Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Sub-Vertical Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. LTM EBITDA 16E EBITDA Earnings
ENTERPRISE & COMMERCIAL SOLUTIONS – TRADING COMPARABLES
VALUATION
As of December 31, 2016
Payments
Financial Software
Payment
Networks
Payment
Processing
Payroll &
Benefits
Fleet
Payments
Transfer &
Remittance
eInvoicing,
EDI, RCM
Data &
Compliance
B2B Transactions
PAGE | 11
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
Announced Date Target/Issuer Buyer Description New Money ($m)
12/31/2016 Financial-Information-Technologies Luminate Capital Partners Provider of data, payment and software serv ices to the beverage alcohol industry. NA
12/20/2016 Appetize Shamrock Capital Advisors Provider of next-generation Point of Sale (POS) platform for retailers. $20
12/07/2016 Nubank DST Global; Founders Fund; QED Investors Provider of digital credit cards and online financial serv ices. $80
11/30/2016 Opendoor Norwest Venture Partners; Khosla Ventures Provider of a marketplace for selling and buying homes. $210
11/28/2016 AvidXchange Fifth Third Capital; Pivot Inv. Partners Provider of accounts payable and invoice automation software. $18
11/25/2016 Stripe CapitalG; General Catalyst Partners Provider of online payment solutions for app publishers and online merchants. $150
11/17/2016 Coverwallet Union Square Ventures Provider of a mobile application for insurance brokerage serv ices. $8
11/16/2016 Womply Sageview Capital Partners Provider of enterprise resource planning and payments solutions to small businesses $30
10/27/2016 Wave BDC Capital; Charles River Ventures Provider of SaaS-based accounting software. $11
10/24/2016 Boston Logic Technology Partners, Inc. Providence Strategic Growth Provider of software, and online marketing serv ices for the real estate industry. NA
10/20/2016 PaySimple Providence Strategic Growth Provider of cloud-based SaaS platform for commerce serv ices. $115
10/18/2016 PayCommerce Tritium Partners Provider of an international payments platform. $22
10/05/2016 Payoneer Susquehanna Growth Equity; TCV Provider of an cross-border B2B payments platform. $180
10/04/2016 BillingTree Parthenon Capital Partners Provider of omni-channel, integrated payments solutions. NA
09/29/2016 Apttus K1 Investment Management Provider of quote-to-cash software solutions. $88
Announced Date Target/Issuer Buyer Description Enterprise Value ($m)
12/29/2016 CaptainU LLC Blue Star Sports Provider of athletic development, payments, and recruiting software. NA
12/23/2016 Paypoint Mobile Payment Business Volkswagen Financial Serv ices AG Provider of mobile payment serv ices. $33
12/16/2016 HemNet Sverige AB General Atlantic LLC Provider of online real estate property search serv ices. $213
12/15/2016 Thomsons Online Benefits Ltd. Mercer LLC Provider of employee benefits administration software. NA
12/07/2016 ParkX, LLC PassportParking, Inc. Provider of mobile payment gateway for parking ramps. NA
12/06/2016 Deltek, Inc. Roper Technologies, Inc. Provider of ERP and HCM software for serv ices firms and government contractors. $2,800
12/01/2016 CardinalCommerce Corp. Visa, Inc. Provider of payment authentication and ecommerce security serv ices. NA
11/29/2016 Versapay Merchant Serv ices Business BluePay Canada LLC Provider of merchant card processing serv ices. $8
11/23/2016 Bluebridge Church Management Busines Pushpay Holdings Ltd. Provider of member management solutions for faith based organizations. $3
11/10/2016 Moneris Solutions, Inc. Vantiv , Inc. Provider of payment processing solutions. $425
11/07/2016 RevSpring, Inc. GTCR LLC Provider of accounts receivable management and revenue cycle management. NA
11/04/2016 M&O Systems, Inc. Broadridge Financial Solutions, Inc. Provider of compensation management solutions. NA
11/01/2016 ADP CHSA & COBRA Business WageWorks, Inc. Provider of direct bill administration serv ices. $235
10/10/2016 Bankstream Intuit, Inc. Provider of transaction data collection and aggregation serv ice. NA
09/19/2016 Visma HgCapital Provider of accounting, payroll, financial consultancy, and staffing serv ices. $482
ENTERPRISE & COMMERCIAL SOLUTIONS – TRANSACTION ACTIVITY
SELECT RECENT M&A TRANSACTIONS
SELECT RECENT PRIVATE PLACEMENT TRANSACTIONS
Note: “NM” indicates transaction value below $1 million.
PAGE | 12
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
Networking & Collaboration
INSTITUTIONAL SOLUTIONS – LANDSCAPE
REPRESENTATIVE INSTITUTIONAL SOLUTION PROVIDERS
Data & Analytics
Trading, Wealth & Risk Management
Compliance & Reporting
Asset Management & Trading
Technology & Underwriting
Lead Generation & CRM
InsuranceBanking
Core Systems
Lending & Workflow
Compliance & Analytics
Distributed Ledger Technology
To receive the latest Institutional fintech market map, please contact HW&Co. at *[email protected].
PAGE | 13
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
RELX Plc REL-GB $43,685 $36,570 90.8% 1.5% 20.2% (8.6%) (8.2%) 46.2% 7.0x 5.2x 15.1x 15.1x 27.4x
Thomson Reuters Corp. TRI-CA 41,419 32,197 95.9% 16.1% 15.9% (6.2%) (7.2%) 28.1% 3.6x 3.7x 12.9x 13.2x 26.3x
Moody's Corp. MCO 19,883 18,024 85.1% (6.0%) 20.1% 1.2% 2.5% 44.8% 5.6x 5.6x 12.6x 12.3x 20.4x
MSCI, Inc. MSCI 8,622 7,415 86.8% 9.2% 80.2% 5.2% 6.9% 48.6% 7.6x 7.5x 15.7x 15.2x 31.0x
SS&C Technologies Holdings, Inc. SSNC 8,296 5,801 82.7% (16.2%) 29.2% 38.1% 51.8% 35.1% 6.0x 5.5x 17.1x 13.7x 67.3x
FactSet Research Systems Inc. FDS 6,724 6,488 89.2% 0.5% 50.5% 9.4% 5.8% 35.0% 5.9x 5.8x 16.8x 16.5x 20.0x
Dun & Bradstreet Corp. DNB 5,733 4,463 85.7% 16.7% (1.2%) 3.0% 4.2% 28.6% 3.4x 3.4x 11.9x 11.7x 46.0x
Fair Isaac Corp. FICO 4,347 3,689 89.7% 26.6% 89.7% 3.8% 5.1% 22.8% 4.9x 4.9x 21.6x 16.7x 35.2x
DST Systems, Inc. DST 3,805 3,504 83.3% (6.1%) 18.1% (6.0%) (43.1%) 19.8% 2.0x 2.4x 10.2x 10.3x 33.6x
Broadridge Financial Solutions, Inc. BR 8,961 7,895 92.4% 23.4% 67.8% 6.9% 42.2% 20.0% 2.8x 2.5x 13.8x 13.5x 26.2x
Fidessa group Plc FDSA-GB 1,005 1,091 77.5% (4.2%) (24.2%) 3.4% 4.2% 26.7% 2.5x 2.5x 9.5x 9.5x 28.3x
Asset Management & Trading Median $8,296 $6,488 86.8% 1.5% 20.2% 3.4% 4.2% 28.6% 4.9x 4.9x 13.8x 13.5x 28.3x
Guidewire Software, Inc. GWRE $3,085 $3,626 77.1% (18.0%) 0.5% 11.4% 13.6% 4.5% 7.1x 6.9x 158.0x 33.5x 246.7x
Ebix, Inc. EBIX 2,021 1,849 90.6% 74.0% 287.8% 8.7% 10.6% 37.8% 7.0x 6.9x 18.6x 18.1x 20.7x
Sapiens International Corp. NV SPNS 634 702 89.7% 40.6% 86.0% 11.9% 15.8% 17.3% 3.1x 2.9x 17.7x 19.9x 32.6x
Insurance Median $2,021 $1,849 89.7% 40.6% 86.0% 11.4% 13.6% 17.3% 7.0x 6.9x 18.6x 19.9x 32.6x
Fidelity National Information Serv ices, Inc. FIS $35,142 $24,827 92.6% 24.8% 40.9% 30.3% 38.2% 28.7% 3.9x 3.7x 13.7x 12.0x 52.2x
Fiserv , Inc. FISV 27,996 23,069 95.3% 16.2% 80.0% 3.6% 5.4% 33.4% 5.1x 5.1x 15.4x 14.5x 26.7x
Jack Henry & Associates, Inc. JKHY 6,915 6,934 97.5% 13.7% 49.9% 6.2% 4.6% 35.2% 5.0x 5.0x 14.2x 14.2x 27.1x
TEMENOS Group AG TEMN-CH 5,253 4,854 97.9% 34.4% 146.2% 42.4% 15.7% 36.5% 6.8x 8.4x 18.7x 23.0x 50.1x
CoreLogic, Inc. CLGX 4,799 3,181 84.8% 8.8% 3.7% 22.3% 26.7% 22.7% 2.6x 2.5x 11.3x 9.7x 23.5x
Oracle Financial Serv ices Software Ltd. 532466-IN 3,542 3,908 77.0% (18.6%) (13.5%) 1.8% 5.7% 38.0% 5.5x 5.4x 14.6x 13.7x 23.0x
DH Corp. DH-CA 3,234 1,775 52.3% (27.0%) (40.7%) 6.7% 7.7% 26.5% 2.6x 2.6x 9.7x 9.6x 59.3x
ACI Worldwide, Inc. ACIW 2,809 2,129 78.2% (15.2%) (16.2%) (7.1%) (6.4%) 13.6% 2.9x 2.9x 21.3x 12.7x 20.6x
Q2 Holdings, Inc. QTWO 1,056 1,158 87.8% 9.4% NA 27.2% 37.2% NA 7.6x 7.1x NA NA NA
Bottomline Technologies, Inc. EPAY 995 1,014 79.4% (15.8%) (30.8%) 2.1% 1.4% 10.4% 2.9x 2.9x 27.8x 13.7x NA
Banking Median $4,170 $3,544 86.3% 9.1% 3.7% 6.4% 6.7% 28.7% 4.5x 4.3x 14.6x 13.7x 26.9x
INSTITUTIONAL SOLUTIONS – TRADING COMPARABLES
VALUATION
Asset Management & Trading
Insurance
Banking
Core
Systems
Technology &
Underwriting
AMT
Data &
Analytics
Fintech Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Sub-Vertical Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. LTM EBITDA 16E EBITDA Earnings
As of December 31, 2016
PAGE | 14
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
Announced Date Target/Issuer Buyer Description New Money ($m)
12/22/2016 Axoni Andreessen Horowitz; Goldman Sachs Provider of distributed ledger technology to the financial serv ices industry. $18
12/13/2016 Indifi Technologies Pvt Ltd. Accel Partners Provider of online platform to connect small businesses with institutional lenders. $10
12/05/2016 Lemonade General Catalyst; Sequoia Capital Provider of artificial intelligence and behavioral software for the insurance industry. $34
11/28/2016 QuantGroup Sunshine Insurance; Fosun Capital Provider of big data analysis for the consumer finance industry. $73
11/17/2016 Fundinfo AG HgCapital Provider of cloud-based investment consulting serv ices. NA
11/15/2016 eOriginal, Inc LLR Partners Provider of digital transaction lifecycle management. $27
11/14/2016 Quantopian Andreessen Horowitz; Bessemer Ventures Provider of online platform for the creation and testing of investment algorithms. $25
11/01/2016 Droit Financial Technologies DRW Trading Group; Goldman Sachs Provider of automated point-of-execution compliance for sales and trading systems. $16
10/31/2016 Riskalyze FTV Capital Provider of risk management and alignment platform. $20
10/25/2016 Hixme Propel Ventures; KPCB Provider of worker-owned benefits insurance solutions. $14
10/19/2016 Ladder Financial Canaan Partners; Lightspeed Ventures Provider of online platform for indiv iduals to purchase life insurance. $14
10/12/2016 Cloud9 Technologies JP Morgan Chase; Point72; Barclays Provider of voice, messaging and collaboration serv ices for institutional trading firms. $30
10/11/2016 Bison Hamilton Lane Provider of data aggregation and analytical systems for the private markets industry. NA
10/05/2016 OpenGamma Accel Partners; ICAP plc Provider of open source financial software and derivatives risk analytics. $13
10/05/2016 Dealpath Bechtel Corporation; Deep Fork Capital Provider of a deal management & collaboration software platform for CRE investments. $8
Announced Date Target/Issuer Buyer Description Enterprise Value ($m)
12/23/2016 WDEV Soluções em Tecnologia SA Ebix, Inc. Provider of software development serv ices to financial institutions. NA
12/19/2016 ISCS, Inc. Guidewire Software, Inc. Provider of financial software development serv ices. $160
12/15/2016 Conifer Financial Serv ices LLC SS&C Technologies Holdings, Inc. Provider of online investment brokerage serv ices. $89
12/12/2016 Online Banking Solutions, Inc. Fiserv, Inc. Provider of secure online banking serv ices for banks and credit unions. NA
12/06/2016 InAuth, Inc. American Express Co. Provider of mobile security software applications to financial institutions. NA
10/24/2016 Scottrade Financial Serv ices, Inc. TD Ameritrade Holding Corp. Provider of web-based personal investing platform and brokerage serv ices. $2,738
10/24/2016 Salentica, Inc. SS&C Technologies Holdings, Inc. Provider of client relationship management software solutions for the financial industry. NA
10/14/2016 PitchBook Data, Inc. Morningstar, Inc. Provider of data, news, and analysis to the private equity industry. $225
10/10/2016 Wheelhouse Analytics LLC Envestnet, Inc. Provider of SaaS based data analytics solutions for investment firms. NA
10/05/2016 Tricor Holdings Ltd. Triv ium Investment Ltd. Provider of integrated business, corporate, and investor serv ices. $834
12/06/2016 Intralinks Holdings, Inc. Synchronoss Technologies, Inc. Provider of inter-enterprise content management and collaboration solutions. $785
12/20/2016 Vermilion Software Ltd. FactSet Research Systems Inc. Provider of client reporting and communications software to finance industry. $67
10/06/2016 Reval.com, Inc. ION Investment Group Ltd. Provider of SaaS-based solutions for treasury and risk management. NA
10/24/2016 Analyze Re, Inc. Verisk Analytics, Inc. Provider of pricing and risk management software for the reinsurance industry. NA
09/22/2016 REDI Global Technologies LLC Thomson Reuters Corp. Provider of trading and execution management solutions. NA
INSTITUTIONAL SOLUTIONS – TRANSACTION ACTIVITY
SELECT RECENT M&A TRANSACTIONS
SELECT RECENT PRIVATE PLACEMENT TRANSACTIONS
Note: “NM” indicates transaction value below $1 million.
PAGE | 15
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
CONSUMER SOLUTIONS – LANDSCAPE
REPRESENTATIVE CONSUMER SOLUTION PROVIDERS
P2P Payments & Transfers
Peer to Peer Personal Finance
Mobile Wallets and GatewaysP2P and Marketplace Lending
Credit Monitoring & Protection
Personal Finance & Roboadvising
Crowdfunding
To receive the latest Consumer fintech market map, please contact HW&Co. at *[email protected].
PAGE | 16
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
Intuit, Inc. INTU 30,064 29,417 96.6% 18.8% 50.2% 6.0% 7.8% 30.4% 6.3x 6.2x 20.8x 16.4x 37.7x
Apple, Inc. AAPL 656,920 617,588 97.6% 10.0% 44.5% (7.9%) 6.6% 32.2% 3.1x 3.0x 9.5x 9.2x 13.9x
Microsoft Corp. MSFT 428,205 483,160 96.9% 12.0% 66.1% (3.2%) 11.0% 32.0% 5.0x 4.6x 15.8x 12.2x 29.9x
Amazon.com, Inc. AMZN 363,860 356,313 88.5% 10.9% 88.0% 19.6% 28.0% 8.7% 2.8x 2.7x 32.7x 24.0x 171.8x
Facebook, Inc. FB 309,231 332,129 86.2% 9.9% 110.5% 37.6% 52.2% 52.0% 12.5x 11.3x 24.1x 17.5x 44.4x
Personal Finance & Mobile Wallet Median $336,545 $344,221 96.3% 11.5% 58.1% 2.0% 9.4% 31.2% 4.1x 3.8x 18.3x 14.3x 33.8x
PayPal Holdings, Inc. PYPL $42,829 $47,626 88.7% 9.0% NA 13.8% 19.5% 20.7% 4.2x 4.0x 20.1x 15.4x 34.6x
The Western Union Co. WU 12,593 10,531 97.6% 21.3% 25.9% (0.7%) 0.3% 24.3% 2.3x 2.3x 9.6x 9.4x 13.2x
Square, Inc. SQ 4,159 4,800 85.7% 4.1% NA 49.0% 28.5% NA 2.5x 2.6x NA 124.9x NA
MoneyGram International, Inc. MGI 1,732 627 92.8% 88.4% (43.2%) 4.7% 6.1% NA 1.2x 1.1x NA 6.5x 69.5x
Green Dot Corp. GDOT 625 1,182 92.6% 43.4% (6.4%) 1.8% 2.5% 18.4% 0.9x 0.9x 4.8x 4.0x 33.2x
LendingClub Corp. LC NA 2,070 46.7% (52.5%) NA 22.4% (49.9%) NA NA NA NA NA NA
On Deck Capital, Inc. ONDK NA 331 44.3% (55.0%) NA 8.8% 13.9% NA NA NA NA NA NA
Peer to Peer Median $4,159 $2,070 88.7% 9.0% (6.4%) 8.8% 6.1% 20.7% 2.3x 2.3x 9.6x 9.4x 33.9x
Fintech Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth LTM EBITDA Enterprise Value / Price /
Sub-Vertical Company Ticker Value Capitalization Week High Performance Performance LTM NTM Margin LTM Rev. 2016E Rev. LTM EBITDA 16E EBITDA Earnings
CONSUMER SOLUTIONS – TRADING COMPARABLES
VALUATION
Peer to Peer
Personal Finance & Mobile Wallets
P2P Transfers
Marketplace
Lending
Personal Fin.
As of December 31, 2016
Mobile
Wallets
PAGE | 17
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
Announced Date Target/Issuer Buyer Description Enterprise Value ($m)
12/13/2016 AFJC Corp. Credit Karma, Inc. Provider of online indiv idual tax filing serv ices. NA
11/20/2016 LifeLock, Inc. Symantec Corp. Provider of theft identity protection serv ices. $2,096
11/18/2016 Cookies Labs GmbH Klarna AB Provider of a mobile application for peer-to-peer payments. NA
11/16/2016 Iron Horse Holdings LLC LendingTree LLC Provider of online credit card comparison, education, monitoring, and management. $130
10/18/2016 KountMoney Lendingkart Provider of data analytics to the P2P personal loan industry. NA
10/13/2016 RoboVest, Inc. InvestView, Inc. Provider of online trading and brokerage applications. NA
10/06/2016 Paribus Co. Capital One Financial Corp. Provides online consumer banking serv ices. NA
10/03/2016 Boltmade, Inc. Shopify, Inc. Provider of consumer centric software for the retail industry. NA
09/13/2016 EyeVerify, Inc. Ant Financial Serv ices Group Provider of Eyeprint ID, a patented and secure mobile eye verification technology. NA
08/29/2016 Pay2Global Ltd. Terra Payment Serv ices Netherlands BV Provider of international money transfer serv ices for consumers. NA
08/10/2016 Entertainment Publications Ltd. BPS Technology Ltd. Provider of online entertainment serv ices and ticket booking solutions. NA
08/10/2016 TransfertCredit Ding Provider of mobile phone money transaction serv ices. NA
07/22/2016 TagPay Societe Generale Provider of mobile wallet solutions for basic feature phones and smartphones. NA
07/11/2016 Lendico PostFinance Provider of a peer-to-peer lending platform. NA
06/20/2016 Mobilend, Inc. Kuber Financial LLC Provider of a mobile lending platform. NA
Announced Date Target/Issuer Buyer Description New Money ($m)
12/05/2016 MoneyLion Edison Partners; FinTech Collective Provider of technology-enabled consumer lending software. $23
11/17/2016 PeerStreet Andreessen Horowitz; Montage Ventures Provider of online asset-backed-security brokerage serv ices to consumers. $15
11/01/2016 Classy JMI Equity, Salesforce Ventures Provider of online fundraising platform for social good organizations. $30
09/30/2016 Remitly IFC, Silicon Valley Bank Provider of mobile money transfer serv ices. $38
09/30/2016 Smava EarlyBirdCapital; Mojo Capital Provider of an online marketplace for peer-to-peer lending. $34
09/30/2016 Remitly IFC, Silicon Valley Bank Provider of mobile money transfer serv ices. $38
09/15/2016 Ellevest Aspect Ventures; Astia Angels Provider of investing tools for women. $9
09/13/2016 Point Andreessen Horowitz; Bloomberg Beta Provider of a platform allowing homeowners to unlock their home equity wealth. $8
08/29/2016 Velocity DIG Investments Provider of a discovery and instant booking platform for premium dining experiences. $23
07/27/2016 Zeek Mobile Scale-Up Venture Capital Provider of a mobile application allowing customers to buy/sell gift vouchers for cash. $10
07/19/2016 CommonBond Neuberger Berman Private Equity Partners Provider of marketplace lending that lowers the cost of student loans for borrowers. $30
07/07/2016 Coinbase Bank of Tokyo Mitsubishi; Sozo Ventures Provider of a bitcoin wallet platform where merchants and consumers can transact. $11
06/21/2016 Number26 Battery Ventures Provider of consumer banking serv ices in Germany. $40
06/20/2016 Lending Club Shanda Group Provider of peer-to-peer loans and investments. $149
06/02/2016 Digit General Catalyst Partners Provider of software applications that automates personal savings. $23
CONSUMER SOLUTIONS – TRANSACTION ACTIVITY
SELECT RECENT M&A TRANSACTIONS
SELECT RECENT PRIVATE PLACEMENT TRANSACTIONS
Note: “NM” indicates transaction value below $1 million.
PAGE | 18
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
SUMMARY OF TECHNOLOGY IPOS
In 4Q 2016, the IPO market for technology companies slowed, with only three technology companies going public, while others selected to remain on the sideline until 1Q 2017.
4Q 2016 technology IPOs included Trivago, which raised $287 million and priced at $11 in December, BlackLine Systems, which raised $146 million with a market cap of $839 and priced at $17 in October, and Coupa Software, which raised $133 million with a market cap of $866 million and priced at $18 in October.
MARKET CAP AT IPO (LTM) REVENUE GROWTH (1YR PRIOR TO IPO)OFFERING SIZE AT IPO (LTM)
RECENT U.S. IPO ACTIVITY (BY OFFERING SIZE)
23%
46%
31%
< 25% 25 - 75% > 75%
36%
36%
29%
$0-50M $50-500M $500M-$1B $1B+
7%
43%
36%
14%
$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
3
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
$0 - 50M $50 - 100M $100 - 250M $250M +
2013 Total: 48 2014 Total: 47 2016 Total: 142015 Total: 31
PAGE | 19
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
(150.0%)
(125.0%)
(100.0%)
(75.0%)
(50.0%)
(25.0%)
0.0%
25.0%
50.0%
75.0%
100.0%
125.0%
150.0%
Circle Size Denotes Revenue ($)
% R
eve
nu
e G
row
thSto
ck
Pe
rfo
rma
nc
e
KEY PERFORMANCE METRICS FOR RECENT SOFTWARE IPOS
IPO DATE
OFFER PRICE
OFFERING SIZE ($M)
OFFER TO CURRENT
(23.9%)(33.5%)
22.2%
51.4%
79.0%
14.7%
(24.4%)
92.3%
23.3%
53.8%
15.8%
66.0%
38.9%
62.5%
6.8%
28.1%
308.2%
70.2%
107.0%
24.3%
48.5% 29.5%
117.1%
22.6% 33.4% 20.5%
84.3%
64.6% 49.3% 33.1%
(150.0%)
(50.0%)
50.0%
150.0%
250.0%
350.0%
450.0%
7/16/15 10/6/15 11/12/15 11/18/15 11/18/15 12/9/15 4/21/16 6/22/16 7/28/16 9/15/16 9/22/16 9/29/16 10/5/16 10/27/16 12/15/16
$16.0 $17.0 $16.0 $9.0 $10.0 $21.0 $14.0 $15.0 $18.0 $12.0 $16.0 $16.0 $18.0 $17.0 $11.0
$620.0 $3,146.0 $422.2 $2,708.5 $540.1 $4,382.2 $1,129.4 $1,233.0 $503.5 $323.1 $596.6 $1,958.5 $866.0 $838.6 $287.2
$103.2 $425.0 $70.4 $243.0 $77.5 $462.0 $112.0 $150.0 $94.5 $90.0 $96.0 $237.9 $133.2 $146.2 $287.2
(23.9%) (33.5%) 22.2% 51.4% 79.0% 14.7% (24.4%) 92.3% 23.3% 53.8% 15.8% 66.0% 38.9% 62.5% 6.8%
MARKET CAP AT OFFER ($M)
PAGE | 20
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
26.4%
5.4%
9.3%
9.7%
11.7%
13.1%
24.4%
Other
Food & Beverage
Services & Leasing
Automotive
Insurance
Healthcare
Computers & Electronics
63% 60%
50%
57%
55%
60%
66%
60% 58%
51%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
4.1x 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
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
FLD/EBITDA SLD/EBITDA Other Sr Debt/EBITDA Sub Debt/EBITDA
LBO LOAN VOLUME BY INDUSTRY MEDIAN LBO DEBT PERCENTAGES
DEBT MARKET OVERVIEW
MIDDLE MARKET LBO LOAN MULTIPLES MIDDLE MARKET LBO VOLUME BY QUARTER
2016 New-Issue LBO Loan Volume: $3.7 billion Percentage of Total Purchase Price
Median middle market LBO loan multiples in 2016 remained in line with the prior two years at 5.3x leverage.
Middle market LBO loan volume increased slightly to $0.9 billion in 4Q 2016.
Technology companies were the largest recipients of LBO loans in 2016, representing 24.4% of new issuance.
As lenders remain selective about which assets they pursue, the median LBO debt percentage declined for the third straight year, reaching 51% in 2016.
Defined as Issuers with EBITDA of $50 Million or LessDefined as Issuers with EBITDA of $50 Million or Less
$1.0B
$2.0B
$1.2B
$1.6B$1.5B
$1.8B
$1.2B
$1.9B$2.0B
$0.4B
$0.9B
$1.2B
$0.7B
$0.9B
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
Institutional Pro Rata
PAGE | 21
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
acquired by acquired acquired by acquired by acquired by recapitalized by acquired by
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HW&CO.’S TECHNOLOGY, MEDIA & TELECOM GROUP:M&A ADVISOR OF CHOICE FOR MARKET LEADING TECHNOLOGY COMPANIES
PAGE | 22
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
PNC AND SOLEBURY CAPITAL OVERVIEW
PNC’S CORPORATE & INSTITUTIONAL BANKING GROUP
M&A advisory and related services are offered through HW&Co.
CORPORATE FINANCE AND M&A ADVISORY
Sell Side Advisory / Capital Raising / Management Buyouts / Fairness Opinions / Acquisitions Advisory
CAPITAL MARKETS ADVISORY & INVESTOR RELATIONS
Capital markets advisory and investor relations services are offered through Solebury Capital, the premier ECM advisory firm in North America
Expert ECM Advice & Judgment / Strategic ECM Based IR Solutions / FINRA Member Firm / Project & Execution Management
ADDITIONAL PNC C&IB SOLUTIONS
Treasury Management Institutional Investment
Management
Wealth Management Capital Markets International Services
SELECT PNC FINTECH RELATIONSHIPS SELECT SOLEBURY FINTECH TRANSACTIONS
$1.5mm sold
to Vista$575mm
IPO
3/21/2012
$284mm
Block
9/18/2013
$319mm
Block
3/7/2013
$525mm
Block
6/7/2016
$345mm
IPO
6/16/2011
$502mm
FO
5/17/2013
$135mm
FO
3/27/2014
$100mm
IPO
4/14/2014
$126mm
FO
1/14/2015
SOLEBURY CAPITAL OVERVIEW
SOLEBURY CAPITAL ADVISORY PLATFORM
CAPITAL MARKETS ADVISORY
Expert ECM Advice & Judgement
• IPOs
• Marketed Follow-ons
• Block Trades
Global reach in partnership with STJ
FINRA member firm
INVESTOR RELATIONS
Strategic ECM-based IR Solutions
• Strategic IR Advisory
• Perception Studies / IR Audits
• Infrastructure Projects
Small / Mid-Cap Focus
IPO Expertise
Unbiased Advice from Seasoned Product Specialists
• > 285 Advisory Engagements / >$133bn Proceeds
• 128 transactions and 44 IPOs since 2013 /
$49.9bn
• “Trusted Advisor” Status with Clients
• High Impact Street Relationships
• High Activity Level = Powerful Information Hub
Action-Oriented IR Model Grounded in ECM DNA
• 40 Active Clients / 70+ Client Engagements
• Boutique Service – Big Firm Resumes
• Team with ECM, Research, Sales and Traditional IR Experience
Representative Clients:
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 at www.harriswilliams.com/industries.
HARRIS WILLIAMS & CO. OFFICE LOCATIONS
UNITED STATES EUROPE
NETWORK OFFICES
Beijing
Hong Kong
Mumbai
New Delhi
Shanghai
Aerospace, Defense & Government
Services
Building Products & Materials
Business Services
Consumer Specialty Distribution
Technology, Media & Telecom
Transportation & Logistics
BostonOne International PlaceSuite 2620Boston, Massachusetts 02110Phone: +1 (617) 482-7501
Cleveland1900 East 9th Street20th FloorCleveland, Ohio 44114Phone: +1 (216) 689-2400
Minneapolis222 South 9th StreetSuite 3350Minneapolis, Minnesota 55402Phone: +1 (612) 359-2700
Richmond (Headquarters)1001 Haxall Point9th FloorRichmond, Virginia 23219Phone: +1 (804) 648-0072
San Francisco575 Market Street31st FloorSan Francisco, California 94105Phone: +1 (415) 288-4260
Washington, D.C. 800 17th St. NW2nd FloorWashington, D.C. 20006Phone: +1 202-207-2300
FrankfurtBockenheimer Landstrasse 33-3560325 FrankfurtGermanyPhone: +49 069 3650638 00
London63 Brook StreetLondon W1K 4HS, EnglandPhone: +44 (0) 20 7518 8900
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
Technology, Media & Telecom
OUR FIRM
PAGE | 24
FINANCIAL TECHNOLOGY SECTOR REVIEW
TECHNOLOGY, MEDIA & TELECOM GROUP │ Q4 2016
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 industryknowledge, 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.
Investment banking services are provided by Harris Williams LLC and Solebury Capital LLC, registered broker-dealers and members of FINRA and SIPC, and Harris Williams & Co.Ltd, which is private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrarof Companies for England and Wales (registration number 7078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams &Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIALINSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANYFINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUTTHE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT THE ABOVE ADDRESSES OR NUMBERS.
The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”). It is not a research report, as such term is defined by applicable lawand regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financialinstruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes norepresentation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to,have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment bankingservices for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities,options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and aresubject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisionsusing their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is notnecessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior writtenconsent.
Copyright© 2017 Harris Williams & Co., all rights reserved.
HARRIS WILLIAMS & CO.
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