Post on 21-May-2018
3
SENIOR FINTECH TEAM
David Francione
Managing Director
617-419-2040
dfrancione@capstoneheadwaters.com
Brad Sportack
Associate
781-534-3205
bsportack@capstoneheadwaters.com
April 2018www.capstoneheadwaters.com
Capstone Headwaters
MERGER & ACQUISITION OVERVIEW
Through Q1 2018, merger and acquisition (M&A) volume and investment
activity, both early stage and later stage, has been off to an impressive start
across the FinTech spectrum. Notable Q1 transactions included Silverlake
Partners’ $500.0 million investment in Credit Karma, valuing the company at
$4.1 billion; CME’s $5.4 billion bid for UK’s NEX trading & risk management
platform; and RBS’ announced acquisition of FreeAgent (an accounting software
provider for freelancers) for $75.0 million. Additionally, the largest of all IPO’s
year-to-date (YTD) has been in the payments sector, with the Brazilian
payments technology company PageSeguro Digital raising $2.3 billion.
While crypto-currencies, such as Bitcoin, were the first to adopt blockchain
technology within Financial Services, blockchain can also be used throughout
other Financial Services segments that are experiencing a digital transformation.
For instance in banking, whereby the traditional physical world of retail
branches are being transformed into online banking. Other segments include
government, healthcare, education, manufacturing, energy, and supply chain. In
2017, there were more than 2,000 blockchain startups in the US and more than
$1.0 billion was invested in blockchain startups globally. In Q1 2018, there were
over 150 investments in blockchain companies with an average financing size of
$9.0 million. During that time, the pace of investments from traditional VC has
accelerated with nearly $650.0 million invested in blockchain related companies.
TABLE OF CONTENTS
M&A Overview
Segment Highlight
Select Transactions
Multiples By Sector
Public Company Data
Firm Track Record
FINANCIAL TECHNOLOGY
Q2 2018
Source: Capital IQ, PitchBook and Capstone Headwaters Research
Nu
mb
er
of
Tra
nsa
ctio
ns
M&A Activity: Financial Technology
71
4955
72 6876
92
110
0
20
40
60
80
100
120
Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
SEGMENT HIGHLIGHT: BLOCKCHAIN
Source: Gartner
Blockchain is an alternate computing model that uses distributed and decentralized computing networks to potentially offer
greater levels of security and lower costs than traditional methods. Because of the fact that blockchain is neither proven nor
does it conform to any set of standards - legal, accounting, regulatory or otherwise - widespread adoption will continue to
take time.
The lack of standards creates the biggest benefit while also giving way to its biggest risk. The biggest benefit could come in
the form of increasing efficiencies via improved process automation (expense reduction) and increased levels of security,
which is paramount in financial services. The resulting benefits are a reduction in the time and cost of processing financial
transactions and improved cash flow. By removing the “centralized” function of a payment, meaning not clearing through a
bank but connecting directly to another user or counterparty, time and expense is reduced by eliminating that bank.
Today, trust is automatically granted to the banking system to help facilitate check payments, for instance. However, with
blockchain, trust is created over time from each party to that block, thereby eliminating that centralized clearing house. This
is by and large, a behavioral change, as much as it is a new technology. The core design goal of blockchain technology is to
add trust within an untrusted environment. Using a public blockchain removes the need for central authorities in arbitrating
transactions. This is because trust is built into the model through immutable records in a distributed ledger, meaning once
the data is there, it can’t be changed and it is spread across multiple nodes or points of contact vs. one centralized database.
In each of the industries and markets below, there are incredible process inefficiencies. The common themes throughout
these markets are that they are highly regulated, process driven and are moving from a physical world to a digital world.
Paper, physical documents and locations are slowly being replaced with the ability to transact online, whether a consumer is
purchasing an insurance policy or depositing a check at a bank, buying a home, paying taxes or tracking a product from
Research & Development to production to delivery.
Blockchain
Banking
Insurance
Real Estate
Government
Supply Chain
Payments
Physical Digital
2
Financial Technology | Q2 2018
SEGMENT HIGHLIGHT: BLOCKCHAIN (CONTINUED)
Source: Gartner
Although the term "blockchain" refers to a specific technology stack, it is also used to refer to a loosely combined set of
technologies and processes. These span middleware, database, security, analytics & artificial intelligence (AI), and monetary
and identity management concepts. Blockchain has become the common shorthand for a diverse collection of distributed
ledger products, with more than 70 offerings in the market. Examples of some of these offerings and their functional
capabilities are below.
Record Keeping
•Protecting internal
records and data from
corruptions with the
usage of blockchain
technology
Driving Efficiency
•The usage of
blockchain to drive
efficiencies in existing
business processes
Digital Assets
•New markets that
facilitate the creation
and trading of new
digital assets
Disruptors
•Reliance on blockchain
foundation to achieve
decentralization of
business and technology
functions
Blockchain Initiatives
Leaders in
Blockchain
3
Financial Technology | Q2 2018
4
Enterprise EV / LTM
Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA
03/21/18*Hangzhou Susong
Technology
Balance
ReachProvides financial payment processing solutions. - - -
03/21/18*SEI Wealth
Platform
BMO Wealth
Management
Single-infrastructure wealth management solution
developed to support client relationship management.- - -
03/20/18DIREXYON
Technologies Inc.XPND Fund Software solutions for strategic financial modelling. - - -
03/20/18ƚ IntelCentrix Inc. IntelHypernet Develops blockchain technologies. $8.0 - -
03/19/18*Rentian
TechnologyLifting Rise
Provides Internet-of-things (IoT) solutions to
enterprise customers. $426.3 2.2x 16.7x
03/14/18* Trustly Group AB Nordic CapitalProvides online banking payment and processing
solutions in Europe.$865.9 - -
03/13/18 QiwiMelqart Asset
ManagementOperates electronic online payment systems. - - -
03/13/18Pariti
TechnologiesTandem Bank
Provides tools and services to find and manage low
cost loans.- - -
03/12/18* Booker Software MINDBODY Develops a cloud-based service commerce platform. - - -
03/12/18 eTouch Systems Virtusa CorporationDevelops and delivers enterprise-class Web 2.0
products.$126.0 - -
03/06/18*Kensho
TechnologiesS&P Global
Provides analytics, artificial intelligence, machine
learning, and data visualization systems.$564.3 28.2x -
03/06/18Innoveo
Solutions
Servion Global
Solutions
Provides software solutions and IT consulting services
for the insurance industry.- - -
03/05/18 PayLane Sp. z o.o. Polskie ePlatnosci Provides online payment processing services. - - -
03/04/18*TBE & Services
S.A.E.Ebitkar Operates as an electronic payment solution provider. $10.4 - -
03/01/18*ƚ Blockchain
DynamicsCryptoGlobal
Operates a platform offering security, custodial
services, trading, and staking. $13.4 - -
02/25/18ƚ Clara Diamond
SolutionsLucara Diamond
Develops and operates a cloud platform for selling
rough diamonds.$44.6 - -
02/23/18InfoVest
ConsultingStatPro Group plc
Develops and licenses investment data management
software for the investment management industry. $9.6 - 6.0x
02/23/18ƚ DragonchainRed Violet Blockchain
& Analytical Solutions
Designs and develops a serverless architecture
blockchain platform.- - -
02/22/18 Provade Smart ERP SolutionsProvides an enterprise vendor management system for
workforce management and procurement.- - -
02/20/18 CreditCall Network MerchantsProvides credit card payment processing services and
online payment systems.- - -
02/20/18IRN Payment
SystemsShift4 Payments Offers online payment processing solutions. - - -
02/15/18* Zenedge OracleDelivers enterprise-grade Web application security
and distributed denial of service protection platform.- - -
02/13/18*Shandong
Primedata
Huaruan Jinxin
TechnologyDevelops software for the financial industry. $15.8 - -
SELECT TRANSACTIONS
Source: Capital IQ, Pitchbook and Capstone Headwaters Research
* Announced transaction as of 3/30/2018ƚ Indicated Blockchain related transaction
Financial Technology | Q2 2018
5
Enterprise EV / LTM
Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA
02/13/18 BlockSeerDMG Blockchain
Solutions
Provides Blockseer to determine the validity of the
transacting party.$9.5 - -
02/09/18* Fraedom Visa Develops travel and expense management solutions. $195.7 4.3x -
02/07/18* PayVida SolutionVictory Square
TechnologiesOperates a global payment facilitator platform. $5.1 - -
02/07/18 Macro Games S.A. Rolling GamesOperates in the computer games and electronic
entertainment businesses.- - -
02/06/18Wombat Security
TechnologiesProofpoint, Inc.
Provides interactive software-based cyber security and
compliance assessment.$225.0 - -
02/05/18* CashTeleportEVI Global Group
Developments
Operates a blockchain payments and funds transfer
platform.$4.4 - -
02/05/18 Becker-CarrollConverge
Technology
Develops blockchain technology enabling enterprise
applications to participate in identity ecosystems.- - -
02/05/18 BestPay Grupo Garantia Payment processing services for merchants. - - -
02/02/18 Aljex Software MacroPoint Develops software for the transportation industry. $32.4 - -
02/02/18 Digital Fuel SV ApptioOffers SaaS and on premise information technology
business management solutions.$42.9 - -
02/02/18OpenLink
Financial Ion Investment
Offers transaction lifecycle management software to
energy, commodities, and financial services industries.- - -
02/01/18*Tapits
TechnologiesICICI Bank
Develops a platform to make payments cashless, card-
less and mobile-less.$0.3 - -
02/01/18* Digiliti MoneyFinTech Imaging
Solutions
Provides cloud-based software-as-a-service financial
technology solutions to the financial services industry. $2.6 - -
02/01/18CannaNUMUS
Blockchain
Abattis
Bioceuticals
Develops a crypto currency which represents the
performance of a portfolio of cannabis companies.$14.0 - -
02/01/18Lieberman
SoftwareBomgar
Provides privileged identity management and security
management products. - - -
02/01/18Great Rock
DevelopmentComepay
Provides Internet acquiring and support services that
facilitate payment transactions. - - -
01/30/18* Cassia ResearchVictory Square
Technologies
Online platform that builds and manages client
relationships. $5.5 - -
01/30/18 Node40HashChain
TechnologyDevelops a blockchain accounting software. $13.4 - -
01/30/18 Angoss Software Datawatch Provides predictive analytics software and solutions. $24.5 2.3x 11.1x
01/29/18 Payvision B.V. ING Groep N.V. Provides ecommerce payments processing solutions. $444.4 - -
01/29/18ƚ PB Blockchain Inc.Pistol Bay Mining Inc.
(TSXV:PST)
Develops blockchain applications for mining and
resource company management.- - -
01/19/18 Growprocess ProText MobilityDesigns and develops seed-to-sale blockchain digital
ledger platform.- - -
01/18/18 SteloAlianca Orgramentose
PatricipacoesOffers e-commerce payment processing services. $38.9 - -
SELECT TRANSACTIONS (CONTINUED)
Source: Capital IQ, Pitchbook and Capstone Headwaters Research
* Announced transaction as of 3/30/2018ƚ Indicated Blockchain related transaction
Financial Technology | Q2 2018
6
Enterprise EV / LTM
Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA
01/18/18 ScaleArc Ignite Technologies Develops a database load balancing software. - - -
01/17/18* Paymark Ingenico Group – GCSProvides electronic payment transaction processing
services.$120.4 2.2x 5.1x
01/16/18*Blackhawk
Network
Silver Lake &
P2 Capital Partners
Provides a range of prepaid gift, telecom, and debit
cards in physical and electronic forms.$3,019.2 1.4x 16.0x
01/16/18*ƚ Stater Blockchain Long BlockchainDevelops blockchain technology based trade
settlement and document verification platform.- - -
01/16/18 ACCEO Solutions N. Harris ComputerDesigns, develops and offers banking, accounting,
business, and cloud computing solutions.$201.4 - -
01/11/18* DST Systems SS&C TechnologiesProvides technology-based information processing
and servicing solutions.$5,671.1 2.6x 11.6x
01/11/18Lombard Risk
ManagementVermeg N.V.
Provides trading, valuation, and risk management
systems.$70.5 1.6x -
01/10/18*Performance
Health
Providence Plan
PartnersOffers business process outsourcing services. - - -
01/10/18 Perforce SoftwareClearlake Capital
Group, L.P.
Develops, markets, and supports software
configuration management systems.- - -
01/10/18 PayMaxx Pro M&A Ventures, LLC Develops payment processing solutions. - - -
01/09/18*Northgate Public
ServicesNEC Provides software and outsourcing services worldwide. $642.0 - -
01/09/18 RGI S.P.A. Corsair CapitalDevelops and delivers software products and
technological services for the insurance sector.- - -
01/05/18 Hashcove Long BlockchainDevelops and delivers blockchain solutions for
blockchain document verification.$13.2 - -
01/04/18Government
Payment ServicesSecurus Technologies
Engages in processing electronic payments of credit
and debit cards. - - -
01/02/18*ƚ CRM Software AdvisorEngine Provides CRM solutions for financial advisors. - - -
SELECT TRANSACTIONS (CONTINUED)
* Announced transaction as of 3/30/2018ƚ Indicated Blockchain related transaction Source: Capital IQ, Pitchbook and Capstone Headwaters Research
Financial Technology | Q2 2018
7
FINANCIAL TECHNOLOGY COVERAGE VERTICALS
Our FinTech practice focuses on providing high quality corporate finance advice to software and hardware technology and
service providers that serve the entire payments spectrum, banks, brokerage firms, asset managers and insurance company
markets.
We leverage domain expertise to provide high-quality merger and acquisition, institutional financing and strategic advisory
services to private and publicly traded financial technology and information-based companies globally.
Fintech companies are
attractive - we make sure
every penny counts.
Capital
MarketsBanks
Insurance
Card
Issuer
Payments
Loan Origination
Mobile Banking
Payment
Processing
Risk
Assessment
Predictive
Analytics
Fraud
Detection
Risk Management
Credit
Monitoring
Payment
Gateway
POS
Processor
MSOs
Payment
Platform
Risk
Management
Trading Analytics
Securities
Trading
Financial Technology | Q2 2018
8
Bank Technology
The mean revenue multiples for Bank Technology Providers
have increased 31.1% over the last five years from 4.5x to 5.9x
and have increased from 5.6x to 5.9x over the last 12 months.
The mean EBITDA multiples have increased by 51.0% over the
same period from 15.7x to 23.7x and have increased from 19.5x
to 23.7x over the past 12 months.
The mean EBITDA multiple decreased by 3.2% and the mean
revenue multiple increased by over 1.7% from our Q1 report.
Financial Systems Software
The mean revenue multiples for Financial Systems Software
increased by 20.5%, from 4.4x to 5.3x over the last five years,
increasing from 4.9x to 5.3x over the last 12 months.
The mean EBITDA multiples increased by 10.4% from 28.8x to
31.8x over the same five year period and increased from 31.1x
to 31.8x over the past 12 months.
The mean EBITDA multiple increased by 6.7% and the mean
revenue multiple increased by about 8.0% from our Q1 report.
Risk Management Providers
The mean revenue multiples of Risk Management Providers
have increased 10% over the last five years from 4.9x to 5.4x
and increased from 5.0x to 5.4x over the last 12 months.
The mean EBITDA multiples have decreased by 54.8% over the
same period from 46.5x to 25.5x and have increased from 20.6x
to 25.5x over the past 12 months.
The mean EBITDA multiple increased by 2.8% and the mean
revenue multiple increased by over 5.8% from our Q1 report.
MULTIPLES BY SECTOR
Source: Capital IQ as of March 30, 2017
4.5x 4.9x 5.6x 5.9x
15.7x 16.3x
19.5x
23.7x
0x
5x
10x
15x
20x
25x
2013 2015 2017 LTM
EV / Revenue EV / EBITDA
4.4x 4.7x 4.9x 5.3x
28.8x30.7x 31.1x 31.8x
0x
5x
10x
15x
20x
25x
30x
35x
2013 2015 2017 LTM
EV / Revenue EV / EBITDA
4.9x 4.7x 5.0x 5.4x
46.5x
53.6x
20.6x25.5x
0x
10x
20x
30x
40x
50x
60x
2013 2015 2017 LTM
EV / Revenue EV / EBITDA
Financial Technology | Q2 2018
9
Financial Information/Data Providers
The mean revenue multiples for Financial Information/Data
Providers have increased 21.4% over the last five years from
4.2x to 5.1x and have increased slightly from 4.9x to 5.1x over
the last 12 months.
The mean EBITDA multiples have increased by 18.6% over the
last 5 years from 13.4x to 15.9x and have increased over the last
12 months, going from 14.9x to 15.9x.
The mean EBITDA multiple increased by 8.9% and the mean
revenue multiple increased by 8.5% from our Q1 report.
Payment Processors
The mean revenue multiples for Payment Processors have
remained flat over the last five years, with a slight drop
occurring in the last 12 months from 3.6x to 3.5x.
The mean EBITDA multiple for this group decreased by 12.8%,
from 20.3x to 17.1x over the same five year period and
decreased slightly from 17.0x to 17.1x in the last 12 months.
The mean EBITDA and revenue multiple have remained flat
since our Q1 report.
Source: Capital IQ as of March 30, 2017
Investment Research Data
The mean revenue multiples for Investment Research Data
providers increased by 9.0%, from 5.5x to 6.0x over the last five
years and increased from 5.5x to 6.0x in the last 12 months.
The mean EBITDA multiples for this group have declined by
11.2% during the same 5 year period and have decreased from
24.8x to 23.0x in the last 12 months.
The mean EBITDA multiple decreased by 3.7% and the mean
revenue multiple increased by 9.0% from our Q1 report.
MULTIPLES BY SECTOR (CONTINUED)
3.5x 3.5x 3.6x 3.5x
20.3x
17.5x 17.0x 17.1x
0x
5x
10x
15x
20x
25x
2013 2015 2017 LTM
EV / Revenue EV / EBITDA
4.2x 4.6x 4.9x 5.1x
13.4x14.5x 14.9x
15.9x
0x
2x
4x
6x
8x
10x
12x
14x
16x
18x
2013 2015 2017 LTM
EV / Revenue EV / EBITDA
5.5x 5.2x 5.5x 6.0x
25.9x23.4x
24.8x23.0x
0x
5x
10x
15x
20x
25x
30x
2013 2015 2017 LTM
EV / Revenue EV / EBITDA
Financial Technology | Q2 2018
10
Payment Services
The mean revenue multiples for Payment Services increased by
28.6%, from 1.4x to 1.8x over the last five year time period with
a slight increase over the last 12 months.
The mean EBITDA multiple for this group increased by 47.9%
over the last 5 years from 7.1x to 10.5x and from 10.4x to 10.5x
over the last 12 months.
The mean EBITDA multiple decreased by 4.5% and the mean
revenue multiple decreased by 5.3% from our Q1 report.
Source: Capital IQ as of March 30, 2017
Payment Technology Providers
The mean revenue multiples for Payment Technology Providers
have increased by 14.2% over the last five years from 4.2x to
4.8x and increased from 4.5x to 4.8x over the last 12 months.
The mean EBITDA multiples increased by 21.2% over the last 5
years from 17.9 to 21.7x and increased from 19.1x to 21.7x over
the last 12 months.
The mean EBITDA multiple decreased by 1.8% and the mean
revenue multiple increased by 4.3% from our Q3 report.
MULTIPLES BY SECTOR (CONTINUED)
The mean revenue multiples for Card Solutions increased by
19.4%, from 7.2x to 8.6x over the last five year time period and
increased from 7.4x to 8.6x over the last 12 months.
The mean EBITDA multiple for this group increased by 18.4%
over the last 5 years from 16.3x to 19.3x and from 17.9x to
19.3x over the last 12 months.
The mean EBITDA multiple decreased by 6.3% and the mean
revenue multiple increased by 2.4% from our Q1 report.
Card Solutions
4.2x 4.0x 4.5x 4.8x
17.9x 17.8x19.1x
21.7x
0x
5x
10x
15x
20x
25x
2013 2015 2017 LTM
EV / Revenue EV / EBITDA
7.2x 7.3x 7.4x8.6x
16.3x 16.9x17.9x
19.3x
0x
5x
10x
15x
20x
25x
2013 2015 2017 LTM
EV / Revenue EV / EBITDA
1.4x 1.4x 1.8x 1.8x
7.1x7.8x
10.4x 10.5x
0x
2x
4x
6x
8x
10x
12x
2013 2015 2017 LTM
EV / Revenue EV / EBITDA
Financial Technology | Q2 2018
11
PUBLIC COMPANY TRADING & OPERATING DATA
Source: Capital IQ as of March 30, 2018
($USD in millions, except per share data)
Stock Price % of 52-Week Market Enterprise LTM LTM
Company Name Ticker 3/30/2018 High Low Cap Value Revenue EBITDA Revenue EBITDA
Bank Technology
Bottomline Technologies (de), Inc. EPAY $38.75 96.9% 180.1% $1,576 $1,652 $366 $42 4.5x 39.6x
Deluxe Corporation DLX $74.01 93.8% 111.4% $3,539 $4,189 $1,966 $485 2.1x 8.6x
Fiserv, Inc. FISV $71.31 95.8% 124.1% $29,466 $34,041 $5,696 $1,788 6.0x 19.0x
Jack Henry & Associates, Inc. JKHY $120.95 95.0% 132.2% $9,345 $9,387 $1,472 $456 6.4x 20.6x
Q2 Holdings, Inc. QTWO $45.55 93.4% 142.6% $1,914 $1,815 $194 ($15) 9.4x NM
Temenos Group AG TEMN $119.98 79.4% 145.8% $8,287 $8,562 $735 $199 11.6x 42.9x
Median $5,913 $6,376 $1,104 $328 6.2x 20.6x
Mean $9,021 $9,941 $1,738 $493 6.7x 26.2x
BPO (Business Process Outsourcing)
ExlService Holdings, Inc. EXLS $55.77 86.7% 123.8% 1,907.2 1,703.5 762.3 111.6 2.2x 15.3x
Genpact Limited G $31.99 92.0% 137.1% $6,189.4 $6,905.1 $2,736.9 $424.8 2.5x 16.3x
WNS (Holdings) Limited WNS $45.33 93.9% 163.7% 2,280.2 2,175.4 714.6 91.6 3.0x 23.7x
Median $2,280.2 $2,175.4 $762.3 $111.6 2.5x 16.3x
Mean $3,458.9 $3,594.6 $1,404.6 $209.3 2.6x 18.4x
Card Solutions
Alliance Data Systems Corporation ADS $212.86 76.5% 103.5% 11,805.5 33,433.3 7,719.4 1,738.0 4.3x 19.2x
American Express Company NYSE: AXP $93.28 91.1% 123.5% 80,234.3 105,380.0 30,466.0 NM NM NM
Blackhawk Network Holdings, Inc. HAWK $44.70 95.1% 137.1% 2,440.2 2,006.6 2,231.6 189.1 0.9x 10.6x
Discover Financial Services DFS $71.93 87.8% 125.1% 25,430.9 51,698.0 7,318.0 NM NM NM
FleetCor Technologies, Inc. FLT $202.50 94.7% 166.6% 18,186.3 21,791.3 2,249.5 1,120.4 9.7x 19.4x
Mastercard Incorporated MA $175.16 95.3% 157.8% 184,160.6 181,902.6 12,497.0 7,248.0 14.6x 25.1x
Visa Inc. V $119.62 94.3% 135.7% $269,971.0 $280,517.0 $18,759.0 $12,837.0 15.0x 21.9x
WEX Inc. WEX $156.62 95.9% 161.0% 6,739.7 8,651.6 1,250.5 440.8 6.9x 19.6x
Median $21,808.6 $42,565.6 $7,518.7 $1,429.2 8.3x 19.5x
Mean $74,871.1 $85,672.5 $10,311.4 $3,928.9 8.6x 19.3x
Investment Research Data
Envestnet, Inc. ENV $57.30 95.1% 180.2% 2,562.7 2,743.2 683.7 77.4 4.0x 35.4x
Financial Engines, Inc. FNGN $35.00 77.8% 143.1% 2,207.1 1,983.0 480.5 111.3 4.1x 17.8x
Morningstar, Inc. MORN $95.52 92.3% 139.6% 4,059.4 3,886.1 911.7 234.5 4.3x 16.6x
MSCI Inc. MSCI $149.47 93.4% 157.3% $13,433.9 $14,622.5 $1,274.2 $659.2 11.5x 22.2x
Median $3,311.1 $3,314.6 $797.7 $172.9 4.2x 20.0x
Mean $5,565.8 $5,808.7 $837.5 $270.6 6.0x 23.0x
Financial Information
Ebix, Inc. EBIX $74.50 85.1% 142.2% 2,345.8 2,707.7 364.0 124.2 7.4x 21.8x
Equifax Inc. EFX $117.81 80.1% 131.5% 14,151.8 16,584.3 3,362.2 1,115.5 4.9x 14.9x
FactSet Research Systems Inc. FDS $199.42 91.7% 128.6% 7,782.1 8,091.7 1,303.1 428.8 6.2x 18.9x
Informa plc INF $10.09 93.0% 113.9% 8,307.3 10,250.4 2,375.6 754.9 4.3x 13.6x
Moody's Corporation MCO $161.30 94.0% 145.6% 30,825.8 35,395.8 4,204.1 1,989.9 8.4x 17.8x
Pearson plc LSE:PSON $10.51 96.5% 133.0% 8,139.6 9,132.0 6,099.9 742.0 1.5x 12.3x
S&P Global Inc. SPGI $191.06 96.6% 149.7% 47,642.5 49,827.5 6,063.0 2,931.0 8.2x 17.0x
The Dun & Bradstreet Corporation DNB $117.00 89.3% 115.6% 4,338.9 5,590.7 1,742.5 458.1 3.2x 12.2x
TransUnion TRU $56.78 92.4% 151.2% 10,440.6 12,863.7 1,933.8 702.4 6.7x 18.3x
Trifast plc TRI $3.62 97.4% 134.6% $439.5 $450.5 $260.9 $28.6 1.7x 15.7x
Wolters Kluwer N.V. WKL $53.21 96.0% 122.2% 14,803.0 17,356.9 5,309.8 1,456.5 3.3x 11.9x
Median $8,307.3 $10,250.4 $2,375.6 $742.0 4.9x 15.7x
Mean $13,565.2 $15,295.6 $3,001.7 $975.6 5.1x 15.9x
Payment Hardware Solutions
Diebold Nixdorf, Incorporated DBD $15.40 49.7% 119.4% 1,169.5 2,938.9 4,609.3 292.0 0.6x 10.1x
Ingenico Group - GCS ING $81.16 69.8% 104.7% 5,052.3 6,911.4 3,014.5 610.0 2.3x 11.3x
NCR Corporation NCR $31.52 68.6% 107.9% $3,737.4 $7,019.4 $6,516.0 $919.0 1.1x 7.6x
VeriFone Systems, Inc. PAY $15.38 71.6% 100.1% 1,697.8 2,416.5 1,853.9 228.6 1.3x 10.6x
Median $2,717.6 $4,925.2 $3,811.9 $451.0 1.2x 10.3x
Mean $2,914.3 $4,821.5 $3,998.4 $512.4 1.3x 9.9x
LTM
EV as a Multiple of:
Financial Technology | Q2 2018
12
PUBLIC COMPANY TRADING & OPERATING DATA
Source: Capital IQ as of March 30, 2018
($USD in millions, except per share data)
Stock Price % of 52-Week Market Enterprise LTM LTM
Company Name Ticker 3/30/2018 High Low Cap Value Revenue EBITDA Revenue EBITDA
LTM
EV as a Multiple of:
Financial Systems Software / Processing
Broadridge Financial Solutions, Inc. BR $109.69 99.7% 165.0% 12,795.8 13,651.9 4,292.3 794.2 3.2x 17.2x
DST Systems, Inc. DST $83.65 99.0% 166.6% 4,962.0 5,502.3 2,218.2 436.6 2.5x 12.6x
Fidelity National Information Services, Inc. FIS $96.30 92.9% 122.1% $31,892.6 $40,099.6 $9,123.0 $2,507.0 4.4x 16.0x
Fidessa group plc FDSA $51.44 93.4% 181.4% 1,980.1 1,850.4 478.4 89.4 3.9x 20.7x
Guidewire Software, Inc. GWRE $80.83 87.2% 146.3% 6,459.1 5,953.9 576.5 39.2 10.3x 151.9x
Intuit Inc. INTU $173.35 96.7% 151.0% 44,396.9 44,773.9 5,434.0 1,637.0 8.2x 27.4x
Linedata Services S.A. ENXTPA:LIN $38.81 54.3% 104.1% 278.7 364.9 214.9 41.2 1.7x 8.9x
SimCorp A/S CPSE:SIM $69.39 93.6% 123.0% 2,734.1 2,732.3 412.3 110.5 6.6x 24.7x
SS&C Technologies Holdings, Inc. SSNC $53.64 99.4% 154.4% 11,083.6 13,064.8 1,675.3 628.7 7.8x 20.8x
The Sage Group plc SGE $8.97 77.5% 102.9% 9,714.2 10,750.1 2,299.4 619.4 4.7x 17.4x
Median $8,086.7 $8,352.0 $1,946.7 $528.0 4.5x 19.0x
Mean $12,629.7 $13,874.4 $2,672.4 $690.3 5.3x 31.8x
Payment Processing
Cardtronics plc CATM $22.31 47.5% 141.2% 1,024.0 1,889.1 1,507.6 332.7 1.3x 5.7x
Euronet Worldwide, Inc. EEFT $78.92 78.1% 105.7% 4,058.0 3,700.3 2,252.4 395.1 1.6x 9.4x
EVERTEC, Inc. EVTC $16.35 83.7% 129.8% 1,183.6 1,752.8 407.1 139.4 4.3x 12.6x
First Data Corporation FDC $16.00 83.2% 109.1% $14,819.5 $36,453.5 $8,129.0 $2,875.0 4.5x 12.7x
Global Payments Inc. GPN $111.52 93.8% 145.8% 17,789.4 21,919.1 3,975.2 1,104.6 5.5x 19.8x
JetPay Corporation JTPY $2.45 50.1% 169.0% 37.8 106.7 76.0 4.1 1.4x 26.3x
Planet Payment, Inc. PLPM $0.00 NA NA 0.0 0.0 53.0 13.2 0.0x 0.0x
Total System Services, Inc. TSS $86.26 95.1% 166.3% 15,675.6 18,534.8 4,928.0 982.0 3.8x 18.9x
Worldpay, Inc. VNTV $0.00 NA NA 24,660.3 30,303.3 4,026.5 888.6 7.5x 34.1x
Median $4,058.0 $3,700.3 $2,252.4 $395.1 3.8x 12.7x
Mean $8,805.4 $12,740.0 $2,817.2 $748.3 3.3x 15.5x
Payment Services
Green Dot Corporation GDOT $64.16 92.5% 200.2% 3,290.4 2,440.2 890.2 138.1 2.7x 17.7x
MoneyGram International, Inc. MGI $8.62 48.1% 101.5% 468.1 1,186.2 1,602.1 221.6 0.7x 5.4x
The Western Union Company WU $19.23 86.6% 104.6% $8,857.4 $11,049.5 $5,524.3 $1,302.7 2.0x 8.5x
Median $3,290.4 $2,440.2 $1,602.1 $221.6 2.0x 8.5x
Mean $4,205.3 $4,892.0 $2,672.2 $554.1 1.8x 10.5x
Payment Technology Solutions
ACI Worldwide, Inc. ACIW $23.72 89.9% 117.3% 2,749.3 3,367.5 1,024.2 178.0 3.3x 18.9x
Cass Information Systems, Inc. CASS $59.51 91.6% 111.8% 731.2 503.1 137.5 48.4 3.7x 10.4x
Mitek Systems, Inc. MITK $7.40 68.8% 115.2% 258.3 219.9 48.3 6.2 4.6x 35.5x
PayPal Holdings, Inc. PYPL $75.87 87.9% 180.4% $91,056.2 $80,430.2 $13,094.0 $2,427.0 6.1x 33.1x
Qiwi plc QIWI $19.11 72.0% 139.8% 1,164.7 857.3 363.3 81.2 2.4x 10.6x
Square, Inc. SQ $49.20 84.2% 295.3% 19,500.7 18,999.7 2,214.3 (23.5) 8.6x NM
Median $1,957.0 $2,112.4 $693.8 $64.8 4.1x 18.9x
Mean $19,243.4 $17,396.3 $2,813.6 $452.9 4.8x 21.7x
Risk Management / BI
Cognizant Technology Solutions Corporation CTSH $80.50 94.6% 140.0% $47,338.1 $43,155.1 $14,810.0 $3,032.0 2.9x 14.2x
Fair Isaac Corporation FICO $169.37 94.3% 134.7% 5,093.5 5,663.1 947.9 216.0 6.0x 26.2x
NICE Ltd. NICE $93.24 95.0% 135.2% 5,707.4 5,762.4 1,332.2 307.3 4.3x 18.7x
Open Text Corporation OTEX $34.80 86.3% 112.7% 9,250.2 11,543.5 2,631.8 732.4 4.4x 15.8x
Pegasystems Inc. PEGA $60.65 93.5% 141.9% 4,736.7 4,513.0 840.6 63.4 5.4x 71.2x
Progress Software Corporation PRGS $38.45 71.7% 134.3% 1,783.6 1,736.5 400.6 144.5 4.3x 12.0x
Tableau Software, Inc. DATA $80.82 92.3% 164.3% 6,589.8 5,735.1 877.1 (146.2) 6.5x NM
Verisk Analytics, Inc. VRSK $104.00 98.0% 137.6% 17,162.1 20,024.8 2,145.2 987.4 9.3x 20.3x
Median $6,148.6 $5,748.7 $1,140.0 $261.7 4.9x 18.7x
Mean $12,207.7 $12,266.7 $2,998.2 $667.1 5.4x 25.5x
Financial Technology | Q2 2018
13
LTM FinTech Index v. Major Indices
PUBLIC COMPANY TRADING & OPERATING DATA
Source: Capital IQ as of March 30, 2018
($USD in millions, except per share data)
Stock Price % of 52-Week Market Enterprise LTM LTM
Company Name Ticker 3/30/2018 High Low Cap Value Revenue EBITDA Revenue EBITDA
LTM
EV as a Multiple of:
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
FinTech Index - 2017 - Index Value S&P 500 (^SPX) - Index Value
Dow Jones Industrial Average (^DJI) - Index Value NASDAQ Composite Index (^COMP) - Index Value
Real Estate Information
CoreLogic, Inc. CLGX $45.23 91.7% 117.5% 3,688.0 5,322.8 1,851.1 385.1 2.9x 13.8x
CoStar Group, Inc. CSGP $362.68 95.8% 180.1% $13,090.8 $11,879.4 $965.2 $250.5 12.3x 47.4x
Reis, Inc. REIS $21.45 96.0% 134.5% 248.2 228.5 48.2 8.2 4.7x 27.7x
Zillow Group, Inc. ZG $54.00 90.4% 163.1% 10,271.3 9,894.2 1,076.8 82.7 9.2x NM
Median $6,979.7 $7,608.5 $1,021.0 $166.6 7.0x 27.7x
Mean $6,824.6 $6,831.2 $985.3 $181.6 7.3x 29.7x
Real Estate Mortgage Technology
Altisource Portfolio Solutions S.A. ASPS $26.56 56.5% 164.3% 462.1 724.5 942.2 124.2 0.8x 5.8x
Ocwen Financial Corporation OCN $4.12 72.4% 194.3% $549.4 $7,373.8 $1,194.6 $278.0 6.2x 26.5x
Median $505.8 $4,049.1 $1,068.4 $201.1 3.5x 16.2x
Mean $505.8 $4,049.1 $1,068.4 $201.1 3.5x 16.2x
Overall
Median $4,058.0 $4,925.2 $1,140.0 $261.7 4.2x 18.7x
Mean $13,370.7 $15,168.0 $2,870.7 $760.4 4.7x 20.3x
Financial Technology | Q2 2018
14
FIRM TRACK RECORD
Channel
management
SaaS platform
processing $2B in
channel payments
annually
Provides short
term financing
solutions to used
vehicle dealers
Provides payment
software and
services for the
multi-space
parking meter
market
Automated accounts
payable software
solutions for the
Fortune 5000
e-commerce platform
to manage orders and
inventory on
Facebook stores
has obtained junior debt
financing second-lien
term loan
a portfolio company of
has been obtained
a senior credit facility
has been acquired by
has been acquired by has been acquired by
has divested specific
assets to
International money
transfer services
focused on the US
Hispanic market
Provides real
estate marketing
services
has been acquired by
Provider of a
network traffic
analytics system
has been acquired by
Financial Technology | Q2 2018
15
FIRM TRACK RECORD
AI platform for
end-to-end
automation of
knowledge-based
processes
Corporate card
payment solutions
to customers
globally
has been acquired by
has divested its
subsidiary
to
has been acquired by
has been acquired by
Provides identity
theft protection
SaaS to
consumers
Financial
communications
and analysis
software
Solutions for e-
commerce and
payment
processing
industries has received a strategic
investment from
KBRA ANALYTICS
Provides home
price analytics
services
AI and cognitive
computing
platform
buy-side advisory
has been acquired by
Leading provider of
enterprise-class
collections and
recovery solutionshas been acquired by
Financial Technology | Q2 2018
David Francione
Managing Director, FinTech
dfrancione@capstoneheadwaters.com | 617-419-2040
Previously, David served as Senior Vice President at Silverwood Partners, a global investment banking firm. Prior to
joining Silverwood Partners, he was head of corporate development for Elcom International, Inc., a $500 million
international publicly-traded eCommerce technology platform company. David began his career with SS&C
Technologies (Nasdaq:SSNC), a leader in securities processing software and analytics and then joined the investment
banking group at Advest, Inc. (acquired by Merrill Lynch), where he focused on public offerings, mergers and
acquisitions, private financings and valuations for financial services, technology and consumer products companies.
David holds a Bachelor of Science degree in Finance from CCSU and earned an MBA in finance from the University of
Connecticut. He serves as a member of the board of directors for the University of Connecticut alumni association
and is co-chair of its investment committee.
FINANCIAL TECHNOLOGY REPORT CONTRIBUTORS
Brad Sportack
Associate
bsportack@capstoneheadwaters.com | 781-534-3205
Brad is an Associate at Capstone Headwaters supporting the Financial Technology team. Prior to joining Capstone
Headwaters, Brad worked as an Associate at Tully & Holland, Inc. where he executed M&A transactions for consumer
product companies. Prior to Tully & Holland, Brad worked as an investment banker at a boutique merchant bank
focused on executing transactions with middle market software companies in the U.S. and abroad. Brad began his
career at Brown Brothers Harriman & Co. where he worked with institutional investment managers in executing
domestic and cross-border securities related transactions. Brad holds a BS in Finance from Bryant University and
received his MBA from Babson College.
16
David Michaels
Managing Director, Head of TMT
dmichaels@capstoneheadwaters.com | 310-929-5955
David Michaels is a Managing Director of Capstone Headwaters where he is responsible for managing the firm’s
Technology & Telecom Group. David founded SagePoint Advisors in 2008, a boutique investment banking firm
focused on providing M&A advisory services to technology and telecom companies. Prior to founding SagePoint,
David was a Co-Founder, Partner and Managing Director at Montgomery & Co., a leading investment bank focused
on serving emerging-growth technology companies. David co-founded Montgomery’s investment banking business
in 1996 and played an instrumental role in building the business to over $50 million in revenues and 80 employees.
David has intimate knowledge of the strategic landscape, market dynamics and technology underpinnings of several
high technology market segments including Mobile Software & Services, Consumer Internet, E-Commerce, Enterprise
SaaS, Cloud & Infrastructure Software and Consumer, IT & Telecom Hardware. Prior to joining Montgomery in 1994,
David worked as an investment banker at Bankers Trust and prior to that, as a structural engineer at General
Dynamics.
Financial Technology | Q2 2018
Gaurav Bhasin
Managing Director, TMT
bhasin@capstoneheadwaters.com | 650-644-7749
Prior to joining Capstone Headwaters, Gaurav was a Managing Director at Pagemill Partners, a division of Duff &
Phelps Securities. Gaurav also previously worked as an investment banker at Banc of America Securities in the
Technology, Media Group where he provided advisory services to technology companies on IPOs, follow-on
offerings, M&A and debt-related transactions representing more than $3B in aggregate value. He has successfully
completed complex cross-border transactions in geographical regions worldwide including Canada, Europe and
Israel. One of his cross-border transactions led ACQ to recognize the transaction as Cross-Border M&A Advisor of
the Year.
Gaurav started his career in engineering and moved into management positions at Vitesse. Gaurav holds an MS in
engineering from Henry Samueli School of Engineering and Applied Science at UCLA where he graduated in the top
5% of his class and attended engineering school on a full research fellowship. He also got an MBA from the Anderson
School of Management at UCLA while working full-time from where he graduated with Anderson Honors.
Report Title | Q4 2017
EXTENDED FINANCIAL TECHNOLOGY TEAM
US MIDDLE MARKET
INVESTMENTBANKOF
THE YEAR
2017
BOUTIQUE RESTRUCTURING
INVESTMENT BANK OF
THE YEAR
2017
MIDDLE MARKET
INVESTMENTBANKOF
THE YEAR
2017
TOP 10 MOST REFERRED
INVESTMENTBANKS
2016
17
John Snead Managing Director
+44 7979 704302
jsnead@capstoneheadwaters.com
Paul Janson COO
303-572-6012
pjanson@capstoneheadwaters.com
Tyler ComannManaging Director
415-272-2463
tcomann@capstoneheadwaters.com
Rachel Candler Director
303-619-3791
rcandler@capstoneheadwaters.com
Teak Murphy Director
310-746-5006
tmurphy@capstoneheadwaters.com
Lisa Tolliver Director
310-929-5955
ltolliver@capstoneheadwaters.com
1
2
www.capstoneheadwaters.com
Capstone Headwaters is an elite investment banking firm dedicated to serving the corporate finance needs of middle market
business owners, investors and creditors. Capstone Headwaters provides merger & acquisition, private placement, corporate
restructuring and financial advisory services across 16 industry verticals to meet the lifecycle needs of emerging enterprises.
Headquartered in Boston, MA and Denver, CO, Capstone Headwaters has 20 offices in the US, UK and Brazil with a global
reach that includes over 300 professionals in 34 countries.
BUILT FOR THE MIDDLE MARKET
UNITED STATES
150+ professionals
18 offices
Atlanta • Boston • Boise
Burlington • Chicago • Dallas
Denver • Greenwich• Houston
Los Angeles • New York • Orange
County • Philadelphia • San Diego •
San Francisco • St Louis • Tampa
Washington DC
INTERNATIONAL
300+ professionals
37 offices in 35 countries
Argentina • Belgium
Brazil • Canada • Chile • China
Colombia • Croatia • Czech Republic • Denmark
Egypt • Finland • France • Germany • Hungary • India
Ireland • Italy • Japan • Mexico • Morocco •Netherlands
Norway • Peru • Poland • Russia • Spain • Sweden • Switzerland
Turkey • United Arab Emirates • United Kingdom • United States • Vietnam