Despite the usual seasonal slow-down in European TMT deal flow in August, which resulted in 25% fewer deals, there was an increase in the aggregate deal value from $18b in July to $25b according to latest data from corporate finance firm Regent Partners. The boost came from e-payment deals, two of which involved UK companies. Meanwhile, valuation multiples increased in the month with aggregate Price/Sales ratios rising to 1.3x from 1.2x in July and aggregate Price/EBITDA ratios at 11.4x up from 9.9x.
The largest deal in the sector (and in the month) was the acquisition of UK-based, Worldpay, by US-based Vantiv, for an enterprise value of £9.3b. Talks between the companies had been announced in July but the final agreement came in early August (see Worldpay and Vantiv seal the deal). In 2016, Worldpay's net revenue was £1.1b and underlying EBITDA was £468m. The combined company will be called Worldpay.
Meanwhile in July, Isle of Man based, London listed, payment solutions provider, Paysafe agreed to buy Delta Card Services, the holding company for Texas-based Merchants' Choice Payment Solutions (MCPS), for $470m. Then, in August, Paysafe accepted a £2.96 billion offer from private equity firms, Blackstone and CVC Capital Partners (see here). Such is life!
There’s much more on the payments sector for subscribers to the TechMarketView FinancialServicesViews research stream in our recent note, FintechViews: Why all the M&A in Payments?And subscribers to the TechMarketView Foundation Service can read our regular quarterly summaries of corporate activity in the UK software and IT services sector in IndustryViews Corporate Activity, or just search on ‘acquisition’ in theUKHotViews archive.