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M&A Activity Down in Financial Technology Sector

The number of deals and overall value fell during the first half of 2014.

M&A activity in the financial technology sector was down for the first half of 2014 as compared with the last six months of 2013, according to new research from Berkery Noyes. The investment bank examined information and technology companies in capital markets, payments, banking, insurance, and other related financial services.

Aggregate transaction volume underwent an 11% decrease in the first half of 2014, while total deal value fell 27%, from $15.15 billion to $11.07 billion, compared to the final six months of 2013. The overall industry’s decrease in volume over the past six months was attributable in large part to the capital markets segment, which saw the number of deals fall 30%, according to Berkery Noyes. This came in the aftermath of a 19% increase between the first half and the second half of 2013, which was the segment’s highest point over the past two and a half years.

Meanwhile, the number of transactions in the banking segment was constant on a half-to-half year basis, the firm said. Deals in the segment completed by notable acquirers in the first half of 2014 included First American Financial Corporation’s acquisition of Interthinx for $155 million and Moody’s Analytics’ acquisition of WebEquity Solutions.

Deal activity in the payments segment saw only a 5% decline in the first half of 2014, Berkery Noyes reported. This followed a 64% increase between the first half and the second half of 2013. In terms of transaction value, six of the industry’s top-ten largest deals year-to-date were payments-related. The largest deal in the mobile payments subsector in the first half of 2014 was Intuit’s acquisition of Check for $360 million.

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Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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Becca L
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Becca L,
User Rank: Author
7/31/2014 | 9:43:52 AM
Re: Payments
Each one has a secret sauce, a vision. Surely we'll all come around and see it too.
Byurcan
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Byurcan,
User Rank: Author
7/31/2014 | 9:31:04 AM
Re: Payments
They're all vying to be the "next big thing."
Becca L
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Becca L,
User Rank: Author
7/30/2014 | 11:44:13 PM
Re: Payments
Maybe it's just a numbers game - the number of payment startups out there is, frankly, ridiculous. They can each only be so differntiated, or claim so much market share.
Byurcan
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Byurcan,
User Rank: Author
7/18/2014 | 12:54:13 PM
Re: Payments
They say it goes in cycles. Also regarding payments, it's easier for a startup tech company to create a payments technology that will be gobbled up, like Intuit/Check, as opposed to a lending paltform for example.
KBurger
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KBurger,
User Rank: Author
7/18/2014 | 12:45:27 PM
Re: Payments
Yes, that is interesting. One reason perhaps is that the payments space is so diverse, it has applications in banking, retailing, travel, utilities & more and definining yourself as "payments tech" can encompass a lot more different functions than "lending systems" or "claims systems," for example. Why do you think the deal activity is down, amid widespread expectations of more conolidation in fintech?
Byurcan
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Byurcan,
User Rank: Author
7/18/2014 | 10:56:10 AM
Payments
Interesting that the payments space sstil seems to have much more activity than other sector. Paymenmts, especially mobile payments, are hot right now.
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