In The News

The principals of M&A are quoted regularly and frequently in publications ranging from Business Week and Forbes to the Wall Street Journal, the New York Times, New York Post, Los Angeles Times, and other major publications worldwide. M&A has been the subject of interviews on business-radio and television programs including the Fox Business News, CBS MarketWatch, The Street.com TV, Yahoo! Finance TV, Sirius XM Radio, BBC-Worldwide and CNBC. Below are links to a sample of articles in which M&A has been quoted:

PE exits, blurred lines drive fintech M&A in '15

December 2015

By Zaeem Shoaib and Salman Samee

Low interest rates and some significant cross-sector deals helped drive a sizable increase in financial technology M&A volume in 2015.

The number of announced transactions classified by SNL as financial technology deals with U.S. targets rose to 183 in 2015 from 175 a year earlier. Meanwhile, the aggregate disclosed deal value in the financial technology space jumped to $48.10 billion from $16.73 billion in 2014, according to SNL data. Several large deals surfaced in the financial technology industry in 2015, a number of which came as private equity firms looked to sell portfolio companies.

Private equity firms were sellers in five of the 10 largest deals in the industry in 2015, including Interactive Data Holdings Corp.'s sale to Intercontinental Exchange Inc., SunGard's sale to Fidelity National Information Services Inc. and SNL Financial LC's sale to McGraw Hill Financial Inc.

Ken Marlin, managing partner and founder of Marlin & Associates, told SNL that several of the larger deals in 2015 emerged as a result of private equity firms having assets that are primed for sale. "We see them thinking that it is a good time to be a seller because interest rates are low and a lot of strategics have cash, so it is a good time to be a seller of billion-dollar-plus assets and banks are willing to lend," Marlin said.

ICE, Fidelity National and McGraw Hill were among the companies that  used  new  debt to finance their multibillion-dollar acquisitions.

The largest transaction of 2015 in the financial technology space was insurance broker Willis Group Holdings Plc's deal to acquire Towers Watson & Co. Advisers believe such cross-industry deals could become more commonplace and are part of "natural evolution."

"I think financial services is becoming much more technology-enabled, and therefore what is fintech and what is not fintech is becoming a very, very blurry line," Michael Kasper, managing director at Freeman & Co. LLC, told SNL.

The line between financial technology and financial services companies has become "extremely gray," compared with 10 years ago when it was easier to distinguish between the two industries, Kasper explained.

"I think you will continue to see a blurring between traditional financial services firms and fintech companies. I think that it is a positive evolution for financial services and for fintech firms," Kasper said.

As financial services and financial technology companies continue to converge, some market observers expect new companies to enter into the competitive landscape and pressure existing players to pursue further acquisitions. The Marlin & Associates executive believes the financial technology industry is seeing early signs of an upheaval due to the rise of new and innovative startups that could disrupt more established players in the sector.

"The big fintech players today — Thomson Reuters, Bloomberg, Interactive Data, Markit — are all under assault, as well as people like PayPal. They are all under assault from young upstarts who are taking advantage of new technologies and new approaches," Marlin said.

Marlin also believes that the fast pace of M&A will cause the financial technology industry to undergo a change in the next decade that will dramatically reduce the number of companies in the space. "There are 10,000 companies in our database, and I believe over the course of the next 10 years you are going to see that get down to a few hundred," he said.

Freeman & Co.'s Kasper told SNL that even though the selling of small startups slowed in 2015, the amount of capital deployed in the financial technology space has increased.

Meanwhile, Marlin believes the market for transactions under $200 million remains strong. He said there has been a decline in the number of deals over $200 million as there are fewer companies left above that threshold. "We have gone through something of a consolidation over the last 10 years, and there are not that many companies outsized to buy," he said. "There is a scarcity of companies that are worth more than $200 million that have become available for sale."

Marlin expects to see high levels of M&A continuing in the market for transactions under $200 million, if macroeconomic factors do not disrupt the industry.

Kasper said the M&A market overall is strong and the financing markets still have enough firepower to support relatively large M&A deals.

"I think what you are seeing in the fintech space, and this is not necessarily even just specific to fintech, is that the market has generally become a seller's market, and I think companies all across the spectrum, if they have shareholders that need liquidity, like private equity, are thinking about whether this market environment isn't one where they ought to think about a transaction," Kasper said.

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