The financial technology sector reported 141 M&A transactions in the first half of 2018, with a total disclosed value of nearly $40 billion, more than 26% up from the prior half year.
The surge in transaction values is due to increasing consumer and enterprise acceptance of digital banking, payments and financial data services says boutique advisory firm Hampleton Partners, which compiled the data.
Big ticket transactions in the first half include PayPal's $2.2 billion bid for iZettle, Worldline's $2.75 billion deal for the payments business of Switzerland's Six, and the mega $17 billion acquisition of Thomson Reuters' financial services unit by Blackstone.
Jo Goodson, managing director, Hampleton Partners, says: “Fintech M&A activity is coming of age after the initial surge in somewhat random deal-making amongst the very early innovators. Now, corporate and financial buyers alike are chasing larger and more targeted investments which can help streamline back-office operations, improve the digital customer experience and cut costs.
”Looking ahead, Goodson expects a further wave of dealmaking in a maturing market for blockchain applications and InsurTech.
Regulatory imperatives such as PSD2 will further drive the M&A boom, she says. The new European Directive is billed by Goodson as a "game-changer for the deal landscape, as it encourages pan-European competition and participation in the payments industry, including non-banks. New entrants will find a level playing field and harmonised consumer protection and rights which will encourage new entrants to the financial services market and fuel further M&A deal growth and valuations.”
Big ticket transactions in the first half include PayPal's $2.2 billion bid for iZettle, Worldline's $2.75 billion deal for the payments business of Switzerland's Six, and the mega $17 billion acquisition of Thomson Reuters' financial services unit by Blackstone.