Payments and capital markets sectors dominate fintech M&A activity

Payments and capital markets sectors dominate fintech M&A activity

There were 192 fintech mergers and acquisitions worth a total of $18.9 billion in the first half of 2015, according to research from investment bank Berkery Noyes.

The number of deals was up 14% on the first six months of last year but down slightly on the second half of 2014, thanks in large part to a drop off in transactions involving payments companies.

However, in terms of value payments is still going strong, comprising six of fintech's top ten largest deals so far this year, with three of these breaking the $1 billion barrier: a private equity consortium’s acquisition of ICBPI for $2.5 billion; Optimal Payments’ buyout of Skrill for $1.7 billion; and Davis + Henderson’s $1.3 billion deal for FundTech.

The segment with the largest increase in volume during the first half of 2015 was capital markets, with a 31% rise, from 58 to 76 deals. In addition, four of the top ten deals occurred in this area, including SS&C Technologies’ acquisition of Advent Software for $2.6 billion and Playtech’s acquisition of Plus500 for $697 million.

The number of transactions in the banking segment remained about constant on a half year basis while insurance saw a 15% bump, from 26 to 30 deals.

Peter Ognibene, MD, Berkery Noyes, says: "An increased appetite for technology spending at financial institutions is presenting vendors with good pipelines and an increased array of legacy tech sellers. In addition, regulatory pressures are requiring more transparency pertaining to risk assessment and valuation methods."

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