Financial Technology, Data, and Analytics

Dear Clients and Friends:

As we come to an end to one of the most tumultuous years most of us have seen in 40 years, we take a moment to reflect on what has become a tale of two cities. One of them – ours – is in remarkably good shape, given the state of the world. As you will see in our report, m&a values and volumes in the eleven segments of the FinTech, Data and Analytics world that we follow – and sometimes lead – is again strong: public markets are up, banks are lending, interest rates are low, and buyers have cash and are looking to spend it. We have advised on three successful transactions in the past 30 days – 18 in the past 14 months.  

We are not unmindful of the “other” city – the one that has not been good for many. We see those impacted by the brush fires that raged in California – and Australia. Brexit uncertainty, and a global pandemic that has caused more than 1.5 million deaths – including more than 300,000 in the US – and shows no signs of slowing. We are reminded every day of the impact of economic shutdowns that have closed hundreds of thousands of businesses – and left millions unemployed. We see those impacted by social inequality. We know that Flint, Michigan still doesn’t have clean water. We could go on.

In other times, when a year-end approaches, we would recap our successes, thank our clients and colleagues for their contributions, and wish everyone “happy holidays”. Somehow, in these times, little of that seems appropriate.

Fortunately, for many, 2020 was not a complete bust. And Tech helped. Remote working turned out to be a surprise benefit for some, as employers adjusted, and families got reconnected. “Tiger King” and “Hamilton” (the movie) streaming into homes, helped. Many (not all) retail stores and restaurants found creative ways to use technology to facilitate online purchases and delivery. Voters and election workers used tech to keep Democracy working. We got two people into space. We learned to appreciate our front-line health care workers and our teachers (homeschooling is hard). And there are now dozens of coronavirus vaccines in various stages of clinical trials, with one approved and others seemingly close. There could be light at the end of this tunnel. US GDP grew by 33% in the third quarter, bringing the economy back to only 3.5 percentage points below its pre-pandemic level. Economists predict continuing US GDP growth in 2021, assuming Congress passes a stimulus package – and people follow CDC recommendations to wear masks and practice social distancing until a preponderance of the population is vaccinated.

As you will see in the report that follows, m&a values among mid-sized FinTech, Data and Analytics companies have benefited from a world in which tech may not solve everything, but sometimes it can help. A few of the more interesting recent transactions over the past month include: 

• Our client, TABS Analytics, a leading provider of cloud-based marketing analytics solutions, has been acquired by Strattam Capital-backed Blacksmith Applications. (Data & Analytics – Financial Services)
• Our client, Grapevine6, which operates a powerful, AI-based digital sales engagement platform, was acquired by Seismic. (Digital Tech)
• Clearlake Capital Group completed its acquisition of Zywave, Inc., and also acquired Advisen Ltd in a transaction rumored to be to be valued at $800mn to $900mn (InsurTech)
• S&P Global is buying IHS Markit for $44bn in an all-stock deal (Data & Analytics – Financial Services)
• Nasdaq has inked an agreement to buy Verafin for $2.75bn in cash, in a move to strengthen the stock exchange operator’s anti-money laundering and fraud software tools (Securities Exchanges)
• Deutsche Boerse said it would acquire an 80% stake in Institutional Shareholder Services (ISS) in a deal that values ISS at $2.3bn (Securities Exchanges)

Stay Safe. 

Ken