Independent mid-market investment bank Berkery Noyes recently released its mergers and acquisitions trend report for the Financial Technology and Information Industry. The report analyzes M&A activity for the first half of 2012, comparing it with activity in the four prior six-month periods.
The report found that while total transaction volume in the first half of the year decreased five percent compared to the latter half of 2011, total transaction value increased 24 percent when comparing the same periods. Furthermore, the median revenue multiple improved from 2.3x to 2.7x.
"It may appear obvious that in general, the greater the EBTIDA margins, the higher the revenue multiple," said John Guzzo, Berkery Noyes managing director, in a release. "However, there are instances when margins are so high that Buyers find minimal margin expansion post-acquisition and discount the revenue multiple accordingly. Our research has shown Companies with EBITDA margins of over 40 percent do not always receive higher revenue multiples. Nonetheless, for the period 2010 through the first-half of 2012, revenue multiples consistently increased in tandem with higher margins, reflecting a more robust level of interest in best of breed, highly-profitable businesses."
The report also states that the Payments segment experienced a volume increase of 20 percent compared to the first half of 2011. Meanwhile, the most active associated buyer over the last two years was VeriFone, a provider of point-of-sale electronic payment solutions, with six transactions.
Berkery Noyes also recently released a few other first half 2012 reports, including one for the Healthcare/Pharma Information and Technology Industry and one for the Online and Mobile Industry. In the Online and Mobile Industry report, it states that transaction volume increased three percent during the first half of this year, from 939 to 970. Meanwhile, transaction value improved 20 percent, rising from $28.38 billion in the second half of 2011 to $34.12 billion in the first half of 2012.
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Edited by Rachel Ramsey