Financial Technology, Data, and Analytics

Dear Clients and Friends,

Our report found below contains an update on m&a deals, values, and trends in the dozen+ segments of the information technology industry that we follow, and sometimes lead. Please see below for our March Market Update.

These days the world seems filled with wishful thinkers; politicians who wish away deficits while cutting taxes and increasing public spending; activists who wish two-thirds of the US House of Representatives and Senate (and three-quarters of the States) would vote to repeal the Second Amendment; those who wish school shootings would end while rejecting any meaningful changes to gun-ownership laws; investors who confuse Blockchain with crypto-currencies – and wish that the US Dollar, Euro and other fiat currencies issued by governments would be replaced with stateless crypto-currencies that don’t require more electricity than Denmark and aren’t susceptible to collusion, hackers, volatility and misuse; and some would-be acquirers who wish they could buy strong, growing, technology-enabled companies on the cheap. For them and others we have news: wishes won’t get you there.      

We get it. There is something romantic about all these concepts. But wishing isn’t a plan. While others wish, the national debt and the price of crypto-currencies keep rising to absurd levels; and kids keep getting killed both at school and in their neighborhoods. Wishing is not enough.

So, we will go beyond wishing to push politicians to spend, tax, and regulate more wisely, reject the extremists and enact common sense solutions; suggest that investors understand the difference between Blockchain and hyped crypto-currencies; and advise would-be acquirers to understand the future value of strong, growing technology-based companies that provide innovative solutions to real problems (whether or not they use Blockchain). Wishful thinking won’t help. (By the way, our current approach isn’t likely to deter the Russians from meddling with Western political systems either.)

A few of the more interesting deals this month include:

• Temenos (SWX:TEMN) agreed to acquire Fidessa for $1.9bn, valuing the company at an implied 3.8x LTM revenue and 21.5x LTM EBITDA,
• Exponent Private Equity acquired the Talent Assessment business of CEB from Gartner for $400mm,
• Warburg Pincus (New York, NY) agreed to acquire a 55% stake in Fiserv Solutions for $395mm, valuing the business at an implied $718mm,
• LogMeIn (NASDAQ:LOGM) agreed to acquire Jive Communications for $342mm with an additional $15mm based on performance over a 2-year period,
• Visa (NYSE:V) agreed to acquire Fraedom for £142mm (~$196mm), valuing the company at an implied 4.3x LTM revenue,
• CITIC Capital Partners (Hong Kong) and Caixin Global (Beijing, China) agreed to acquire Global Market Intelligence Division (“GMID”) from Euromoney Institutional Investor for $181mm, valuing the company at 12x LTM operating profit,
• The Shenzhen Stock Exchange (Shenzhen, China) and The Shanghai Stock Exchange (Shanghai, China) agreed to acquire a 25% stake in Dhaka Stock Exchange for $119mm, implying an enterprise value of $477mm

Please see below for more of our March Market Update.