Financial
Technology Sector
Overview of Market Activity
in the Financial Technology Sector
William Blair’s investment banking group combines significant transaction experience,
rich industry knowledge, and deep relationships to deliver successful advisory and
financing solutions to our global base of corporate clients. We serve both publicly traded
and privately held companies, executing mergers and acquisitions, growth financing,
special situations and restructuring, and general advisory projects. This comprehensive
suite of services allows us to be a long-term partner to our clients as they grow and
evolve. In 2012, the investment banking group completed 76 merger-and-acquisition
transactions worth more than $13.8 billion in value, involving parties in 21 countries and
five continents, and was an underwriter on over 20% of all U.S. initial public offerings.
About William Blair
Investment Banking
Financial Technology Sector – December 2013
Financial Technology Sector – Fourth Quarter 2013 Update 1
Financial Technology Sector – Fourth Quarter 2013 Update
The year 2013 will likely prove one remembered most for strong performance in the equity capital markets with the
S&P and DJIA gaining roughly 25% and 21%, respectively. On the M&A front, the year can be best summarized as the
year of the haves and the have nots. Within the financial technology market in particular, valuation gaps are at an
all-time high—companies with highly differentiated solutions and go-to-market strategies that have proven, strong growth
and profitability are realizing significantly outsized valuation multiples compared with “average” industry participants.
We believe this trend will continue as public market valuations and recent precedent M&A trades have added to a
healthy and frothy M&A environment moving into 2014; we are strongly optimistic that M&A activity within the
financial technology sector will be robust during 2014.
The M&A environment remains active, and aggressive multiples are being realized for truly differentiated
opportunities. Good examples of this year’s “haves” include Digital River’s acquisition of LML Payment Systems,
Ingenico’s acquisition of Ogone, Vantiv’s acquisition of Element, PayPal’s acquisition of Braintree, TSYS’s acquisition of
NetSpend, ACI Worldwide’s acquisition of Official Payments, Davis + Henderson’s acquisition of Harland, NCR’s
acquisition of Digital Insight, and CVC Capital’s acquisition of Skrill. While each of these transactions had distinct
differentiating qualities, all of these targets had similar overarching characteristics, such as high growth; a bend toward
e-commerce and mobile; unique competitive positioning; platform flexibility; and healthy, accelerating profit margins.
More than ever, acquirers are paying outsized valuations for truly differentiated assets.
Private equity firms continue to be highly active within the sector, but they are primarily sellers in this environment
because they are taking advantage of attractive market valuations, and in some cases, quick returns (e.g., NCR
acquisition of Digital Insight).
The U.S. markets remain active and show signs of a continuing bull market with some strategists calling for a further
10% rise in capital market returns during 2014. For the year, the S&P 500 and NASDAQ are up roughly 25% and 33%,
respectively. Many firms are taking advantage of the open markets coupled with the attractive valuations to bolster
their cash war chests and to realize liquidity events for selling shareholders. We are optimistic that the equity capital
markets for both initial public offerings and secondary offerings will remain open and active during 2014.
The financial technology industry continues to be a high-growth sector and one that is undergoing significant
disruption as traditional payments, alternative payment technologies (i.e., mobile) and marketing, data analytics, and
value-added solutions continue to converge. The next several quarters should bring several notable acquisitions as both
strategic and financial buyers continue to invest in growth and look to capitalize on a quickly transforming landscape.
Phil Olson
+1 312 364 8798
[email protected]
Financial Technology Sector
–
December 2013
2 William Blair Financial Technology Team Contact Information
William Blair Financial Technology Team Contact Information
Rob Metzger,
head of technology and co-head of financial technology, joined the corporate finance department
of William Blair & Company in 1999. While at William Blair & Company and in his prior position at ABN AMRO
Incorporated, he focused on the corporate finance needs of insurance, financial technology, and specialty
finance companies. Mr. Metzger graduated in 1989 with highest honors from the University of Illinois,
receiving a B.S. in accountancy. In 1995, he graduated with distinction from Northwestern University’s J.L.
Kellogg Graduate School of Management, receiving an M.B.A. in finance and strategy. He is a certified public
accountant.
+1 312 364 8517
[email protected]
Dan Daul,
managing director and co-head of financial technology, joined the corporate finance department of
William Blair & Company in 2004. While at William Blair & Company and in his prior position at Robert W.
Baird & Co., Mr. Daul focused on the investment banking needs of financial technology, transaction processing,
and IT security companies. Mr. Daul has been involved in more than 50 transactions aggregating more than
$5.0 billion in transaction value, with an emphasis on mergers and acquisitions. He graduated in 1991 from the
University of Wisconsin with a B.S. degree. In 1997, he graduated from Northwestern University’s J.L. Kellogg
Graduate School of Management and received an M.B.A. in finance and strategy.
+1 312 364 8457
[email protected]
Phil Olson,
director in the financial technology group, joined the corporate finance department of William
Blair & Company in 2003. Both at William Blair & Company and in his prior position at Merrill Lynch, he
focused on the corporate finance needs of financial technology and financial services companies. Mr. Olson
graduated in 2001 with high honors from the University of Illinois with a B.S. in finance. In 2007, he graduated
from Northwestern University’s J.L. Kellogg Graduate School of Management with an M.B.A. in finance and
entrepreneurship.
+1 312 364 8798
[email protected]
Daniel Laszlo,
vice president in the financial technology group, joined William Blair & Company in 2011.
Previously he worked at GTCR, where he focused on private equity investments in the financial technology and
specialty finance sectors. Before GTCR, Mr. Laszlo worked at Goldman Sachs, where he focused on the
investment banking needs of a variety of financial services clients. During his career, he has completed more
than 15 mergers and acquisitions and debt and equity transactions. Mr. Laszlo holds an M.B.A. in finance and a
B.S. in accounting and finance from the Kelley School of Business at Indiana University.
+1 312 364 5084
Financial Technology Sector – December 2013
William Blair Industry Events 3
William Blair Industry Events
September 17-18, 2014,
Four Seasons Hotel Chicago
17th Annual
Private Equity Conference
50-plus companies expected to
participate
More than 600 institutional private
equity investors and venture capital
investors
Roundtable discussions focused on the
following industry sectors and topics:
–
Technology
–
Financial services
–
Business services
–
Commercial services
–
Consumer and retail
–
Healthcare
–
Industrials
June 10-12, 2014,
Four Seasons Hotel Chicago
34th Annual
Growth Stock Conference
2013 conference highlights:
–
218 companies participated
–
More than 905 institutional
clients
–
More than 4,100 one-on-one
meetings arranged
May 15, 2014,
Four Seasons Hotel San Francisco
Second Annual
Technology Company
Growth Conference
78 companies presented in
2013
–
Leading late-stage private
technology companies
Business development/
financial sponsor invitations:
–
Public companies with
market cap greater than
$1 billion
–
Large private companies
with revenues greater than
$500 million
–
Operating (or seeking
acquisitions) in technology,
financial technology,
and/or healthcare IT
Financial Technology Sector
–
December 2013
4 Spotlight – William Blair Recent M&A Transactions
Spotlight – William Blair Recent M&A Transactions
On September 23, 2013, ACI Worldwide and Official Payments announced that they had
entered a definitive transaction agreement; the transaction closed on November 5, 2013
Official Payments has more than 3,000 customers representing access to more than 100
million end-users; it processes roughly 20 million payments and more than $9 billion in
volume annually
This transaction represents William Blair’s 102nd financial technology transaction
since 2005
William Blair represented LML Payment Systems in connection with its sale to Digital River
This acquisition expands Digital River’s payment offering to smaller retailers beyond its
traditional client base while continuing to diversify its global commerce capabilities
This transaction represents William Blair’s 101st financial technology transaction
since 2005
William Blair acted as exclusive financial advisor to EVO Payments International in
conjunction with its partnership with Madison Dearborn
This transaction rovides growth capital to fund international expansion and additional growth
initiatives
EVO serves about 275,000 merchants and processes more than $31 billion in annual
payments
This transaction represents William Blair’s 100th financial technology transaction
since 2005
William Blair represented Litle & Co. in connection with its sale to Vantiv, Inc.
Litle is a leading e-commerce payment processor
The acquisition enables Vantiv to more fully service its customers and expand its
market-leading capabilities to include high-growth e-commerce
This transaction represents William Blair’s 99th
financial technology transaction
since 2005
William Blair represented Accelerated Payment Technologies, Inc. in connection with its sale
to Global Payments Inc.
Landmark transaction in the payments industry: APT is a leader in integrated payment
solutions with $8 billion in annual card volume and a network of 700 resellers across a range
of markets
This was a highly strategic acquisition for Global Payments given APT’s unique distribution
and presence in attractive growth verticals, such as the dental, medical, pharmacy, specialty
retail, automotive, and veterinary markets
$148,780,000
has been acquired by
ACI Worldwide, Inc.
November 2013
$102,800,000
has been acquired by
Digital River, Inc.
January 2013
$250,000,000
has received an
investment from
Madison Dearborn
Partners
December 2012
$361,000,000
has been acquired by
Vantiv, Inc.
November 2012
$413,000,000
has been acquired by
Global Payments Inc.
Financial Technology Sector – December 2013
Spotlight – William Blair Recent Public Equity Transactions 5
Spotlight – William Blair Recent Public Equity Transactions
William Blair was a co-manager on the QIWI follow-on offering in October 2013
QIWI is a leading provider of next-generation payment services in Russia and the
Commonwealth of Independent States (CIS)
QIWI has deployed more than 11 million virtual wallets and over 169,000 kiosks and
terminals, and it has enabled more than 40,000 merchants to accept over RUB 39 billion in
cash and electronic payments monthly from more than 65 million consumers using the
company’s network at least once a month
William Blair was a co-manager on the Evertec follow-on offering in September 2013
Evertec is the leading full-service transaction processing business in Latin America and the
Caribbean
Based in Puerto Rico, Evertec provides a broad range of services across 19 countries in the
region
The company processes more than 1.2 billion transactions annually and manages the
electronic payment network for more than 4,100 automated teller machines (ATMs) and over
104,000 point-of-sale (POS) payment terminals
William Blair was the lead bookrunner on the WageWorks follow-on offering in August 2013
WageWorks is a leading on-demand provider of tax-advantaged programs for
consumer-directed health, commuter, and other employee spending account benefits, or CDBs, in the
United States
WageWorks administers and operates a broad array of CDBs, including spending account
management programs, such as health and dependent care flexible spending accounts, health
savings accounts, health reimbursement arrangements, and commuter benefits
William Blair was the sole bookrunning manager on the Mitek follow-on offering in June 2013
Mitek is a leading mobile imaging software solutions provider
Mitek provides imaging software solutions often embedded in other mobile banking or
enterprise applications developed by banks, insurance companies, or their partners and
marketed under their own proprietary brands
New products positioned to diversify revenue stream and enhance visibility
William Blair underwrote a $190 million convertible bond for Bottomline Technologies in
December 2012
Bottomline Technologies provides cloud-based payment, invoice, and banking solutions to
corporations, insurance companies, financial institutions, and banks worldwide
Its solutions are used to streamline, automate, and manage processes and transactions
involving global payments, invoice receipt and approval, collections, cash and document
management, risk mitigation, reporting, and document archiving
$287,540,153
Follow-on Offering
October 2013
$517,500,000
Follow-on Offering
September 2013
$138,076,762
Follow-on Offering
August 2013
$17,249,993
Confidentially Marketed
Follow-on Offering
June 2013
$189,750,000
Convertible Note Offering
Financial Technology Sector
–
December 2013
6 Recent William Blair & Company Financial Technology Transactions
Recent William Blair & Company Financial Technology Transactions
Financial Technology M&A
Financial Technology Public Equity
$148,780,000
has been acquired by
ACI Worldwide, Inc.
November 2013
$102,800,000
has been acquired by
Digital River, Inc.
January 2013
$250,000,000
has received an investment from Madison Dearborn PartnersDecember 2012
$361,000,000
has been acquired by
Vantiv, Inc.
November 2012
$130,000,000
has been acquired by
Seven Bank, LTD
October 2012
$413,000,000
has been acquired by
Global Payments Inc.
October 2012
Not Disclosed
has merged with
BenefitMall
May 2012
$186,000,000
has been acquired by
LifeLock, Inc.
March 2012
$115,000,000
has been acquired by
Paychex, Inc.
February 2011
$120,500,000
has been acquired by
Spectrum Equity Investors
December 2010
$150,000,000
has been acquired by
American Express
November 2010
$64,300,000
has been acquired by
Equifax, Inc.
October 2010
ENABLING TRUSTED ACCESS
Not Disclosed
has been acquired by
Euronet Worldwide Inc.
August 2010
$300,000,000
has been acquired by
Jack Henry & Associates
June 2010
Not Disclosed
has been acquired by
Global Payments Inc.
September 2009
$50,000,000
Follow-on OfferingOn File
$169,708,412
Follow-on OfferingOctober 2013
$287,540,153
Follow-on OfferingOctober 2013
$517,500,000
Follow-on OfferingSeptember 2013
$138,076,762
Follow-on OfferingAugust 2013
$17,249,993
Confidentially Marketed Follow-on OfferingJune 2013
$165,000,000
Convertible Note Offering
December 2012
$308,012,550
Follow-on OfferingAugust 2012
$150,312,500
Follow-on OfferingNovember 2011
$212,960,000
Follow-on OfferingFebruary 2011
$234,481,000
Initial Public Offering
October 2010
$124,200,000
Initial Public Offering
June 2010
$60,900,000
Confidentially Marketed Follow-on OfferingJune 2010
$96,600,000
Follow-on OfferingMarch 2010
$139,725,000
Initial Public Offering
Financial Technology Sector – December 2013
Relevant Financial Technology Research Coverage 7
Relevant Financial Technology Research Coverage
Robert Napoli
joined William Blair in 2011 and specializes in the financial technology industry. Previously, Mr.
Napoli worked at Piper Jaffray as an equity analyst covering technology and financial services companies. Mr.
Napoli received his B.S. degree in finance and accounting from Indiana University of Pennsylvania and an
M.B.A. from the University of Pittsburgh.
Christopher Shutler,
CFA, joined William Blair in 2007 and specializes in the financial technology industry.
Previously, Mr. Shutler worked at Credit Suisse as an associate analyst covering educational and business
services companies. Mr. Shutler received his B.B.A. degree in finance and business economics from the
University of Notre Dame.
Financial Technology Sector
–
December 2013
8 Update on Financial Technology and Payments Landscape
Update on Financial Technology and Payments Landscape
Card Networks
Market Valuations (EBITDA)
Observations:
Continuing to diversify from core business and affect other markets (acquiring,
mobile, e-commerce)
Looking to leverage their networks in the nontraditional channels
Adjusting pricing strategies in the United States related to the implementation of
the Durbin amendment
Investing heavily in mobile, prepaid, and international
Mobile wallets (V.Me, MasterPass, Serve, Google, PayPal) are battling for
consumer attention
Faster growth outside the United States
Multi-decade secular growth opportunity
Remaining acquisitive
FY1:
16.0x-18.0x
FY2:
14.0x-15.0x
Money Transfer
Market Valuations (EBITDA)
Observations:
Traditional retail-based business under pressure; increased regulatory scrutiny
New technologies are emerging; XOOM went public
Growth of global remittances forecast to grow more than 5% by World Bank
Diversifying products focused on underbanked consumer and underserved
businesses
Globalization trend remains a positive for the industry
FY1:
7.5x-8.5x
FY2:
7.0x-8.0x
Financial Institution Processing
Market Valuations (EBITDA)
Observations:
Significant shift in mortgage processing toward purchase mortgages given
significant decline in refinancing volumes will create more competition and
market share battles, amplified by implementation of CFPB rules in first quarter
2014 and risk of noncompliance in mortgage underwriting
Dodd-Frank regulations also creating significant data/compliance needs for
mortgage originators
FY1:
9.5x-10.5x
Financial Technology Sector – December 2013
Update on Financial Technology and Payments Landscape 9
Bank Functionality
Market Valuations (EBITDA)
Observations:
Fully consolidated (especially with ACI/S1 transaction and the proposed
ACI/Online Resources acquisition)
Focus will be on penetration of the financial institution base, building out biller
networks, and acquiring new technology that improves the customer experience
(e.g., mobile capture) or increases revenue (e.g., real-time bill-pay and
person-to-person payments)
Secular tailwinds support the transition from manual-based technology to
automated invoicing, payments/remittance, settlement, and reconciliation
providers (preferably SaaS providers)
Many banks are due for a refresh of their online banking capabilities
FY1:
9.5x-10.5x
FY2:
8.5x-9.5x
Merchant Acquiring
Market Valuations (EBITDA)
Observations:
Value is primarily being driven by unique distribution and technology
Large players seeking growth and scale internationally and in e-commerce
through consolidation—recent flurry of sale processes
Durbin amendment helping drive incremental near-term profitability
Market is paying increasing attention to PayPal, Square, and Intuit’s GoPayment,
among others
FY1:
8.0x-9.0x
FY2:
7.5x-8.5x
Fleet Processing
Market Valuations (EBITDA)
Observations:
Consolidated market with just a handful of key participants—high barriers to
entry (WEX acquired Fleet One in second half 2012)
Focused on growth outside the United States by acquiring platform companies or
keystone clients
Move to outsourcing by major oil companies likely outside the United States
Business model is highly attractive with strong recurring revenue and very
attractive EBITDA margins
Augmenting growth by offering payment solutions to other industries, such as
healthcare, education, and online travel
FY1:
12.5x-13.5x
Financial Technology Sector
–
December 2013
10 Update on Financial Technology and Payments Landscape
ATM Processing/
Payment Enablers
Market Valuations (EBITDA)
Observations:
Mature and steady—growth will primarily come from market share gains in the
United States and overseas expansion
Adding ancillary services organically and growing through acquisition (e.g.,
Cardtronics’ recent purchase of the assets of Merrimak ATM Group)
Consolidation accelerating in United States, focus on global expansion; recent
entry of Seven Bank will provide increased competition
Mobile payments/alternative payments are potential long-term threats to
cash-dependent business models
Recent IPO of QIWI, a leading enabler of electronic payments in Russia
FY1:
8.5x-9.5x
FY2:
8.0x-8.5x
E-commerce
Market Valuations (EBITDA)
Observations:
Continues to grow as a percentage of total retail spending and is growing about
15% per year
Online/mobile wallet is the buzz
Mobile wallets developed by PayPal, Visa, American Express, and Google will be
battling for consumer attention
Buzz around Google’s recently announced partnership with Braintree
Heavy investment in loyalty-related payment programs by American Express and
Alliance Data Systems
FY1:
11.0x-12.0x
FY2:
10.0x-11.0x
Prepaid
/
Market Valuations (EBITDA)
Observations:
Remains one of the fastest-growth segments within payments, but valuations
have recently come under pressure
Current macro environment is favorable for prepaid providers
New entrants, industry is becoming more competitive (American Express recently
entered Wal-Mart with Bluebird, a low-fee prepaid product)
Highly fragmented—consolidation still occurring; TSYS purchasing NetSpend
Wheels in motion for regulation to increase; will likely result in enhanced
transparency for the consumer
FY1:
9.5x-10.5x
FY2:
8.0x-9.0x
(1) Digital River provides a range of solutions (e.g., payments and e-commerce)
Financial Technology Sector – December 2013
Update on Financial Technology and Payments Landscape 11
Mobile Payments
Market Valuations (EBITDA)
Observations:
Smartphones will be about 50% of the handset shipment by 2014
Technology is rapidly adopting mobile POS solutions and geolocation-based
couponing/ads
Many new technologies and strategies emerging, long-term winners still difficult
to determine
Acceleration in partnerships driven by technology Visa/Monitise, FIS/Monitise,
FIS/Banks/Fiserv/Mitek
Land-grab strategy—near-term focus is on customer acquisition
FY1:
11.0x-12.0x
FY2:
10.0x-11.0x
Data/Analytics
Market Valuations (EBITDA)
Observations:
Continuing consolidation trend to offset costs of compliance and regulatory creep,
particularly in residential real estate and mortgage
Expecting a significant opportunity in real estate/mortgage to provide analytics
around residential mortgages as the market moves from taxpayer-supported
industry to a mix of private capital and GSEs (private capital will require lots of
data and want to do analytics on residential mortgage portfolios, especially if
there is a return to securitization
Growing opportunity for data/analytics in the commercial mortgage/loan/etc.
space as the CMBS market heats up as a source of financing
Significant focus on providing platforms around data, not just data, especially for
the midmarket that cannot afford customized solutions
Focus on the P&C insurance market, connecting real estate to consumers to
underwriting
FY1:
10.0x-10.5x
Financial Technology Sector
–
December 2013
12 Update on Financial Technology and Payments Landscape
Security
Market Valuations (EBITDA)
Observations:
$45 million prepaid debit card cyber heist from BankMuscat and enStage, Inc.
highlights vulnerabilities in the banking/prepaid card system
Highly attractive multiples seen in the market—Sourcefire being acquired by
Cisco for 10 times TTM revenue (35 times 2014 free cash flow)
Tighter compliance regulations and increasing awareness of network breaches
driving higher demand
Sophistication of attacks driving increased spending and support for innovation
in earlier-stage companies
Changes in traditional IT infrastructure, such as cloud, mobile, BYOD, and
virtualization, is creating new opportunities in the security space
FY1:
10.5x-11.5x
FY2:
10.0x-11.0x
Payroll/HR
Market Valuations (EBITDA)
Observations:
Focus on new technology and expanding product offering, especially for cloud-
and SaaS-related products
Still highly fragmented market undergoing consolidation—macro environment is
modest impediment to new client growth and interest rates remain a drag on
profit margins, but those factors should eventually reverse
Focus on providing add-on offerings to core payroll product (e.g., insurance,
screening, and HR management)
FY1:
11.0x-13.0x
FY2:
10.0x-12.0x
Investment Services Software/
Technology
Market Valuations (EBITDA)
Observations:
Technology driving growth of personalized investment advice for the masses
Financial software remains under pressure; however, the sector will benefit from
increased investment in Basel I/II and Dodd-Frank initiatives
Move from defined benefit to defined contribution for retirement plans opens up
management opportunities
Wealth management industry trends include independent advice, fee-based
compensation, open architecture, and the fiduciary standard of care
Regulatory tailwind for independent investment advice to defined-contribution
plans
FY1:
11.0x-12.0x
Financial Technology Sector – December 2013
Financial Technology Sector Market Analysis 13
Financial Technology Sector Market Analysis
Sector Analysis
LTM Price Performance and 2013E P/E
($ in millions)
Company Market Cap LTM Price Performance P/E 2013E
ATM Processing/Payment Enablers
NCR Corp. $5,815.7 46.1% 12.5x
MICROS Systems, Inc. $4,044.2 23.6% 22.7x
Ingenico SA $3,951.6 40.6% 20.6x
VeriFone Systems, Inc. $2,797.6 (15.7%) 20.8x
Qiwi plc $2,437.1 NA 38.4x
Diebold, Incorporated $2,178.8 14.1% 25.1x
Cardtronics Inc. $1,916.8 85.7% 22.3x
PayPoint plc $1,181.1 29.3% 21.3x
DirectCash Payments Inc. $322.3 (23.1%) NMF
Sector Median $2,437.1 26.4% 21.8x
Bank Technology
Fidelity National Information Services, Inc. $14,754.6 40.4% 17.8x
Fiserv, Inc. $14,172.4 42.7% 18.3x
Jack Henry & Associates Inc. $4,858.5 46.1% 25.1x
Lender Processing Services, Inc. $2,999.1 41.3% 15.1x
ACI Worldwide, Inc. $2,487.4 49.7% 25.3x
Temenos Group AG $1,834.8 56.1% 23.2x
Monitise plc $1,451.1 73.8% NMF
Bottomline Technologies (de), Inc. $1,271.9 41.0% 30.2x
Ellie Mae, Inc. $775.4 13.6% 28.6x
Sector Median $2,487.4 42.7% 24.2x
BPO
Tata Consultancy Services Limited $62,924.1 32.8% 23.1x
Infosys Ltd. $30,708.3 19.7% 19.0x
Wipro Ltd. $18,481.0 4.2% 16.3x
HCL Technologies Ltd. $12,166.5 44.3% 15.2x
Genpact Ltd. $4,120.3 11.5% 15.8x
Convergys Corporation $2,087.2 31.5% 18.6x
TeleTech Holdings Inc. $1,294.9 50.9% 17.9x
WNS (Holdings) Ltd. $1,021.0 88.3% 15.8x
Digital River Inc. $597.4 22.3% 31.3x
Mitek Systems, Inc. $212.2 193.7% NMF
Sector Median $3,103.7 32.1% 17.9x
Financial Technology Sector
–
December 2013
14 Financial Technology Sector Market Analysis
LTM Price Performance & 2013E P/E (cont.)
($ in millions)
Company Market Cap LTM Price Performance P/E 2013E
Card Networks
Visa Inc. $129,512.2 35.9% 26.1x
American Express Company $91,915.1 53.5% 17.4x
MasterCard Incorporated $91,584.5 55.7% 28.9x
Discover Financial Services $25,415.6 28.1% 10.8x
Sector Median $91,749.8 44.7% 21.7x
Data/Analytics
Thomson Reuters Corporation $30,905.1 35.7% 20.6x
McGraw Hill Financial, Inc. $20,174.6 40.3% 22.6x
Experian plc $18,468.6 11.0% 20.6x
Moody's Corporation $16,052.9 53.6% 21.0x
Equifax Inc. $8,193.1 31.4% 18.7x
IHS Inc. $7,688.3 24.2% 23.3x
MSCI Inc. $5,256.0 53.1% 20.4x
FactSet Research Systems Inc. $4,870.9 22.3% 21.8x
Dun & Bradstreet Corp. $4,459.0 47.6% 15.2x
Morningstar Inc. $3,832.9 30.7% 30.4x
CoreLogic, Inc. $3,301.8 36.3% 19.2x
Acxiom Corporation $2,499.9 88.1% 44.4x
Fair Isaac Corporation $2,039.8 37.8% 18.1x
F. Marc de Lacharrière (Fimalac) Société Anonyme $1,694.2 40.6% 17.0x
Harte-Hanks Inc. $497.9 50.5% 15.8x
Intersections Inc. $140.1 (16.1%) 17.9x
Sector Median $4,664.9 37.1% 20.5x
Fleet Processing/Technology
FleetCor Technologies, Inc. $10,016.2 133.3% 30.2x
WEX Inc. $3,858.8 37.9% 22.4x
Sector Median $6,937.5 85.6% 26.3x
Investment Services Software & Technology
SEI Investments Co. $5,729.0 52.6% 24.4x
Computershare Limited $5,527.8 9.6% 17.6x
Broadridge Financial Solutions, Inc. $4,546.8 61.6% 17.6x
TIBCO Software Inc. $3,966.1 (3.5%) 23.3x
DST Systems Inc. $3,723.6 53.2% 19.6x
SS&C Technologies Holdings, Inc. $3,544.9 82.7% 22.0x
Financial Engines, Inc. $3,415.2 158.4% NMF
Advent Software, Inc. $1,793.8 57.9% 27.2x
Envestnet, Inc. $1,343.6 186.0% 72.3x
Fidessa group plc $1,296.8 52.3% 25.9x
Linedata Services SA $232.7 95.3% 10.5x
Sector Median $3,544.9 57.9% 22.6x
Financial Technology Sector – December 2013
Financial Technology Sector Market Analysis 15
LTM Price Performance & 2013E P/E (cont.)
($ in millions)
Company Market Cap LTM Price Performance P/E 2013E
Money Transfer
The Western Union Company $9,206.0 32.2% 11.5x
Moneygram International Inc. $1,222.4 75.6% 16.8x
Sector Median $5,214.2 53.9% 14.2x
Payment Processing
Cielo SA $22,791.4 31.9% 19.8x
Alliance Data Systems Corporation $11,801.2 70.0% 24.6x
Total System Services, Inc. $5,892.7 41.5% 18.2x
Global Payments Inc. $4,595.7 43.6% 16.3x
Vantiv, Inc. $4,401.2 39.8% 19.6x
Wirecard AG $4,205.4 52.5% 36.6x
Euronet Worldwide Inc. $2,435.5 117.7% 24.8x
EVERTEC, Inc. $1,808.4 NA 15.2x
Heartland Payment Systems, Inc. $1,656.1 51.6% 20.0x
Optimal Payments Plc $822.1 212.4% 24.6x
Global Cash Access Holdings, Inc. $638.3 23.9% 12.6x
Net 1 Ueps Technologies Inc. $370.2 5.4% 8.1x
Sector Median $3,320.4 43.6% 19.7x
Payroll/HR
Automatic Data Processing, Inc. $38,523.6 41.0% 26.8x
Paychex, Inc. $15,970.0 34.4% 27.3x
Towers Watson & Co. $7,985.8 112.9% 19.3x
The Ultimate Software Group, Inc. $4,375.9 65.8% NMF
WageWorks, Inc. $1,982.2 210.2% NMF
Insperity, Inc. $901.3 16.7% 25.5x
Sector Median $6,180.8 53.4% 26.2x
Prepaid
Green Dot Corporation $905.9 95.1% 20.3x
Higher One Holdings, Inc. $459.1 11.3% 17.9x
Sector Median $682.5 53.2% 19.1x
Security
Symantec Corporation $15,653.8 19.9% 12.5x
CA Technologies $14,892.0 48.9% 10.9x
Check Point Software Technologies Ltd. $12,151.5 34.0% 18.2x
Trend Micro Inc. $5,199.0 50.3% NA
Fortinet Inc. $2,795.2 (14.4%) 37.1x
Imperva Inc. $1,122.8 46.2% NMF
Sector Median $8,675.3 40.1% 15.3x
Financial Technology Sector
–
December 2013
16 Financial Technology Sector Market Analysis
Index Price Performance Price by Sector (Market Value Weighted)
3 Months
1 Year
3 Years
Note: Sector indices are market capitalization weighted
Sources: Capital IQ and FactSet Research Systems, or Wall Street Market Research data as of December 1, 2013 9.9% 7.3% 4.9% 2.7% 1.8% 1.7% 1.7% 1.7% 1.0% 0.7% 0.5% (1.9%) Fleet Processing / Technology Prepaid Card
Networks Payroll / HR InvestmentServices Software & Technology
Payment
Processing Processing /ATM Payment Enablers
Bank
Technology AnalyticsData / BPO Security TransferMoney
53.4% 33.5% 11.4% 9.0% 5.4% 4.5% 4.0% 4.8% 2.2% 2.7% 5.6% 18.6% Fleet Processing / Technology Prepaid Card Networks Payroll / HR Investment Services Software & Technology Payment Processing ATM Processing / Payment Enablers Bank Technology Data / Analytics
BPO Security Money
Transfer 124.2% (28.7%) 40.1% 16.7% 7.5% 14.7% 10.9% 10.6% 4.3% 2.0% 6.8% (3.1%) Fleet Processing / Technology Prepaid Card
Networks Payroll / HR InvestmentServices Software & Technology
Payment
Processing Processing /ATM Payment Enablers
Bank
Financial Technology Sector – December 2013
Financial Technology Sector Market Analysis 17
Financial Technology Sector Market Analysis
Public Comparable Analysis
ATM Processing/Payment Enablers
($ in millions)
Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
NCR Corp. $34.95 19.1% $5,815.7 $7,648.7 1.25x 1.23x 1.16x 13.3x 9.0x 8.0x 26.9x 12.5x 11.2x 13.2% 1.0x MICROS Systems, Inc. $53.72 3.4% $4,044.2 $3,607.6 2.81x 2.80x 2.68x 14.2x 13.2x 11.7x 28.7x 22.7x 20.1x 17.0% 1.3x Ingenico SA(2) $74.89 5.6% $3,951.6 $4,493.4 2.62x 2.38x 2.18x 13.1x 12.1x 10.7x 25.4x 20.6x 17.5x 19.0% 1.1x
VeriFone Systems, Inc. (3) $25.61 41.1% $2,797.6 $3,644.8 2.08x 2.15x 1.98x 11.9x 12.3x 10.6x NMF 20.8x 14.8x 5.0% 4.2x
Qiwi plc $46.78 8.3% $2,437.1 $2,258.0 6.66x 12.13x 10.19x NMF NMF 20.7x 52.5x 38.4x 30.3x 27.9% 1.4x Diebold, Incorporated $34.13 3.7% $2,178.8 $2,582.3 0.89x 0.91x 0.88x 12.5x 12.1x 11.1x 26.4x 25.1x 19.0x 10.0% 2.5x Cardtronics Inc. $42.59 3.5% $1,916.8 $2,433.5 2.92x 2.80x 2.45x 12.7x 11.0x 9.9x 35.4x 22.3x 18.9x 15.0% 1.5x PayPoint plc $17.39 14.7% $1,181.1 $1,142.8 3.38x 3.21x 3.03x 14.5x 14.1x 13.2x 26.3x 21.3x 19.3x 11.3% 1.9x DirectCash Payments Inc. $18.40 42.6% $322.3 $484.8 2.07x 2.13x 1.90x 7.3x 7.8x 6.7x NMF NMF NMF NA NA Mean $38.72 15.8% $2,738.3 $3,144.0 2.74x 3.30x 2.94x 12.4x 11.4x 11.4x 31.7x 23.0x 18.9x 14.8% 1.8x Median $34.95 8.3% $2,437.1 $2,582.3 2.62x 2.38x 2.18x 12.9x 12.1x 10.7x 26.9x 21.8x 19.0x 14.1% 1.4x
Bank Technology
($ in millions)Enterprise Value/Revenue Enterprise Value/EBITDA Price / Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
Fidelity National Information Services, Inc.
$50.68 1.6% $14,754.6 $18,925.3 3.16x 3.12x 2.97x 12.4x 10.2x 9.7x 25.9x 17.8x 16.1x 11.8% 1.5x
Fiserv, Inc. $109.89 5.9% $14,172.4 $17,782.4 3.75x 3.70x 3.53x 12.9x 11.5x 10.6x 24.8x 18.3x 16.5x 12.5% 1.5x Jack Henry & Associates
Inc. $56.77 1.3% $4,858.5 $4,694.7 4.07x 3.98x 3.67x 12.5x 11.8x 11.0x 29.1x 25.1x 22.9x 11.7% 2.2x Lender Processing
Services, Inc.(4) $35.11 0.5% $2,999.1 $3,869.1 2.08x 2.17x 2.29x 11.7x 8.5x 8.6x 23.2x 15.1x 15.7x 9.0% 1.7x
ACI Worldwide, Inc. $64.53 1.2% $2,487.4 $3,085.2 3.83x 3.49x 2.88x 15.7x 12.3x 10.1x 35.0x 25.3x 20.2x 16.0% 1.6x Temenos Group AG $26.54 7.7% $1,834.8 $2,033.1 4.45x 4.34x 4.02x 22.1x 14.6x 12.8x 42.7x 23.2x 19.9x 25.4% 0.9x Monitise plc(2) $0.88 17.6% $1,451.1 $1,321.0 11.94x 8.69x 5.92x NMF NMF NMF NMF NMF NMF NA NA
Bottomline Technologies
(de), Inc. $34.57 6.0% $1,271.9 $1,239.4 4.76x 4.59x 3.87x NMF 20.9x 18.0x NMF 30.2x 24.6x 18.8% 1.6x Ellie Mae, Inc. $28.20 17.9% $775.4 $753.8 5.89x 5.89x 5.03x NMF 19.4x 16.3x 52.2x 28.6x 26.0x 19.7% 1.5x
Mean $45.24 6.6% $4,956.1 $5,967.1 4.88x 4.44x 3.80x 14.6x 13.6x 12.1x 33.3x 23.0x 20.2x 15.6% 1.5x
Median $35.11 5.9% $2,487.4 $3,085.2 4.07x 3.98x 3.67x 12.7x 12.0x 10.8x 29.1x 24.2x 20.1x 14.2% 1.5x
(1) LTM as of September 30, 2013 or as otherwise indicated (2) LTM as of June 30, 2013
(3) LTM as of July 3, 2013
(4) Announced strategic acquisition by Fidelity National Financial
Financial Technology Sector
–
December 2013
18 Financial Technology Sector Market Analysis
BPO
($ in millions)
Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM (1) 2013E 2014P LT Growth Rate 2013E
Tata Consultancy Services Limited $32.13 12.6% $62,924.1 $62,220.3 5.45x 5.00x 4.23x 18.4x 16.8x 14.4x 30.6x 23.1x 18.7x 22.6% 1.0x Infosys Ltd. $53.74 2.8% $30,708.3 $27,107.3 3.43x 3.51x 3.21x 12.9x 13.7x 12.3x 21.5x 19.0x 17.2x 12.7% 1.5x Wipro Ltd. $7.55 10.3% $18,481.0 $18,060.6 2.86x 2.73x 2.45x 13.7x 12.7x 11.6x 22.2x 16.3x 14.4x 14.5% 1.1x HCL Technologies Ltd. $17.41 8.3% $12,166.5 $12,249.2 2.88x 2.57x 2.27x 12.7x 10.6x 9.8x 21.2x 15.2x 14.1x 23.1% 0.7x Genpact Ltd. $17.90 19.0% $4,120.3 $4,303.9 2.07x 2.02x 1.82x 11.2x 11.3x 10.3x 20.9x 15.8x 15.6x 14.6% 1.1x Convergys Corporation $20.52 1.3% $2,087.2 $1,622.4 0.80x 0.79x 0.76x 7.1x 6.7x 6.2x 25.8x 18.6x 17.3x 11.1% 1.7x TeleTech Holdings Inc. $25.68 5.4% $1,294.9 $1,279.1 1.09x 1.09x 1.02x 8.8x 8.7x 7.7x 22.9x 17.9x 15.5x 12.0% 1.5x WNS (Holdings) Ltd. $20.02 12.9% $1,021.0 $1,082.3 2.23x 2.34x 2.11x 13.1x 12.3x 10.6x 41.1x 15.8x 13.7x 20.0% 0.8x Digital River Inc.(2) $17.87 13.5% $597.4 $443.9 1.10x 1.13x 1.16x 19.7x 13.6x 9.4x NMF 31.3x 32.7x 10.0% 3.1x
Mitek Systems, Inc. $6.99 10.3% $212.2 $188.9 12.76x 12.12x 9.83x NMF NMF NA NMF NMF NMF 25.0% NA
Mean $21.98 9.7% $13,361.3 $12,855.8 3.47x 3.33x 2.89x 13.1x 11.8x 10.3x 25.8x 19.2x 17.7x 16.6% 1.4x
Median $18.96 10.3% $3,103.7 $2,963.1 2.55x 2.46x 2.19x 12.9x 12.3x 10.3x 22.6x 17.9x 15.6x 14.5% 1.1x
Card Networks
($ in millions)
Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
Visa Inc. $203.46 0.9% $129,512.2 $127,326.2 10.81x 10.55x 9.53x 17.1x 16.2x 14.3x 29.2x 26.1x 22.0x 18.7% 1.4x American Express Company $85.80 0.5% $91,915.1 $125,768.1 4.14x 3.81x 3.62x NMF NMF NMF 20.7x 17.4x 15.9x 11.5% 1.5x MasterCard Incorporated $760.81 0.6% $91,584.5 $88,182.5 10.87x 10.42x 9.30x 18.6x 18.0x 15.7x 32.9x 28.9x 24.6x 17.9% 1.6x Discover Financial Services(3) $53.30 2.2% $25,415.6 $42,067.6 6.18x 5.13x 4.98x NMF NMF NMF 10.9x 10.8x 10.5x 10.7% 1.0x Mean $275.84 1.0% $84,606.8 $95,836.1 8.00x 7.48x 6.86x 17.8x 17.1x 15.0x 23.4x 20.8x 18.2x 14.7% 1.4x Median $144.63 0.7% $91,749.8 $106,975.3 8.50x 7.78x 7.14x 17.8x 17.1x 15.0x 24.9x 21.7x 18.9x 14.7% 1.5x
(1) LTM as of September 30, 2013 or as otherwise indicated
(2) eCommerce company provides a range of solutions (i.e. payments, eCommerce, etc.) (3) LTM as of November 30, 2012.
Financial Technology Sector – December 2013
Financial Technology Sector Market Analysis 19
Data/Analytics
($ in millions)
Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
Thomson Reuters
Corporation $37.36 2.6% $30,905.1 $37,693.1 2.91x 2.99x 2.93x 13.1x 11.4x 10.5x 39.0x 20.6x 18.3x 7.0% 3.0x McGraw Hill Financial,
Inc. $74.50 1.8% $20,174.6 $20,244.6 4.17x 4.17x 3.94x 11.6x 11.4x 10.4x 23.6x 22.6x 20.1x 17.2% 1.3x Experian plc $18.46 14.5% $18,468.6 $21,826.6 4.56x 4.47x 4.17x 13.3x 13.1x 12.2x 30.4x 20.6x 18.7x 11.9% 1.7x Moody's Corporation $74.63 1.7% $16,052.9 $16,408.3 5.57x 5.59x 5.24x 12.6x 12.2x 11.3x 24.1x 21.0x 19.1x 13.5% 1.6x Equifax Inc. $67.33 1.4% $8,193.1 $9,524.8 4.06x 4.13x 3.90x 12.8x 11.8x 11.2x 26.8x 18.7x 17.2x 11.3% 1.7x IHS Inc.(2) $114.43 2.8% $7,688.3 $9,727.1 5.74x 5.36x 4.45x NMF 17.8x 14.1x 62.1x 23.3x 20.2x 14.6% 1.6x MSCI Inc. $44.39 1.1% $5,256.0 $5,779.6 5.69x 5.63x 5.31x 12.7x 12.8x 12.0x 24.6x 20.4x 18.6x 12.0% 1.7x FactSet Research Systems Inc.(3) $113.00 2.1% $4,870.9 $4,674.2 5.45x 5.37x 5.02x 14.4x 14.1x 13.3x 27.4x 21.8x 20.5x 11.4% 1.9x
Dun & Bradstreet Corp. $116.85 0.7% $4,459.0 $5,705.9 3.48x 3.46x 3.39x 12.4x 10.1x 9.8x 19.1x 15.2x 14.1x 8.0% 1.9x Morningstar Inc. $83.41 3.1% $3,832.9 $3,657.1 5.31x 5.22x 4.78x 17.1x 16.5x 14.2x 36.3x 30.4x 26.2x 15.0% 2.0x CoreLogic, Inc. $35.23 0.9% $3,301.8 $3,971.1 2.42x 2.47x 2.46x 10.7x 8.5x 8.4x 23.5x 19.2x 18.4x 8.9% 2.2x Acxiom Corporation $33.28 3.3% $2,499.9 $2,527.1 2.31x 2.31x 2.32x 13.3x 12.4x 11.1x 43.2x 44.4x 39.9x 12.1% 3.7x Fair Isaac Corporation $59.01 1.1% $2,039.8 $2,426.6 3.26x 3.24x 3.10x 12.2x 12.2x 12.1x 24.6x 18.1x 17.7x 13.3% 1.4x F. Marc de Lacharrière (Fimalac) Société Anonyme(4) $62.19 2.6% $1,694.2 $1,871.6 42.19x 26.97x 20.84x NMF NMF NMF NMF 17.0x 15.2x NA NA Harte-Hanks Inc. $7.96 27.1% $497.9 $522.2 0.69x 0.84x 0.93x 6.5x 7.2x 6.9x 14.4x 15.8x 15.0x (5.9%) NMF Intersections Inc. $7.74 43.4% $140.1 $121.2 0.37x 0.39x 0.38x 4.6x NA NA 16.1x 17.9x 22.8x NA NA Mean $59.36 6.9% $8,129.7 $9,167.6 6.14x 5.16x 4.57x 12.0x 12.2x 11.2x 29.0x 21.7x 20.1x 10.7% 2.0x Median $60.60 2.4% $4,664.9 $5,190.1 4.12x 4.15x 3.92x 12.7x 12.2x 11.2x 24.6x 20.5x 18.7x 11.9% 1.7x
Fleet Processing/Technology
($ in millions)Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52 WK High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
FleetCor Technologies,
Inc. $121.78 0.8% $10,016.2 $10,804.4 12.83x 12.27x 9.82x 22.9x 21.3x 16.9x 39.5x 30.2x 24.6x 17.7% 1.7x WEX Inc. $99.26 2.3% $3,858.8 $4,182.9 5.94x 5.87x 5.37x 14.2x 12.8x 11.8x 27.2x 22.4x 20.0x 14.2% 1.6x
Mean $110.52 1.6% $6,937.5 $7,493.7 9.38x 9.07x 7.60x 18.6x 17.0x 14.3x 33.4x 26.3x 22.3x 15.9% 1.6x
Median $110.52 1.6% $6,937.5 $7,493.7 9.38x 9.07x 7.60x 18.6x 17.0x 14.3x 33.4x 26.3x 22.3x 15.9% 1.6x
(1) LTM as of September 30, 2013 or as otherwise indicated (2) LTM as of August 31, 2013
(3) LTM as of November 30, 2013 (4) LTM as of December 31, 2012
Financial Technology Sector
–
December 2013
20 Financial Technology Sector Market Analysis
Investment Services Software & Technology
($ in millions)
Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
SEI Investments Co. $33.58 2.4% $5,729.0 $5,201.8 4.78x 4.68x 4.24x 20.1x 13.2x 11.3x 26.6x 24.4x 20.3x 14.9% 1.6x Computershare
Limited(2) $9.94 4.7% $5,527.8 $6,796.2 3.37x 3.35x 3.27x 17.9x 12.8x 11.8x 51.2x 17.6x 16.4x 13.5% 1.3x
Broadridge Financial
Solutions, Inc. $38.15 5.8% $4,546.8 $4,887.7 1.97x 1.95x 1.88x 9.9x 9.6x 9.2x 19.2x 17.6x 17.7x 10.5% 1.7x TIBCO Software Inc.(3) $24.17 12.3% $3,966.1 $3,837.0 3.65x 3.60x 3.30x 19.7x 13.6x 11.8x 49.9x 23.3x 19.8x 13.5% 1.7x
DST Systems Inc. $88.30 0.7% $3,723.6 $4,427.1 1.67x 2.26x 2.22x 10.8x 9.7x 9.2x 18.8x 19.6x 17.2x 10.0% 2.0x SS&C Technologies
Holdings, Inc. $43.11 1.2% $3,544.9 $4,299.5 6.13x 6.03x 5.56x 15.5x 14.8x 13.5x 37.7x 22.0x 19.7x 14.8% 1.5x Financial Engines, Inc. $67.75 1.8% $3,415.2 $3,273.3 14.54x 13.65x 11.39x NMF NMF NMF NMF NMF 72.8x 35.0% NA Advent Software, Inc. $35.15 3.0% $1,793.8 $2,102.5 5.57x 5.51x 5.18x NMF 19.8x 15.9x 59.9x 27.2x 25.5x 16.0% 1.7x Envestnet, Inc. $39.75 3.4% $1,343.6 $1,306.9 6.15x 5.40x 3.92x NMF NMF 24.2x NMF 72.3x 52.5x 28.4% 2.5x Fidessa group plc(2) $34.61 5.4% $1,296.8 $1,220.4 2.90x 2.65x 2.54x 14.7x 9.4x 8.9x 33.0x 25.9x 24.0x 9.1% 2.9x Linedata Services SA(2) $30.56 3.1% $232.7 $296.1 1.50x 1.33x 1.26x 6.1x 5.3x 5.1x 10.3x 10.5x 9.9x 5.7% 1.8x Mean $40.46 4.0% $3,192.8 $3,422.6 4.75x 4.58x 4.07x 14.3x 12.0x 12.1x 34.1x 26.0x 26.9x 15.6% 1.9x Median $35.15 3.1% $3,544.9 $3,837.0 3.65x 3.60x 3.30x 15.1x 12.8x 11.5x 33.0x 22.6x 19.8x 13.5% 1.7x
Money Transfer
($ in millions)Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
The Western Union
Company $16.67 17.0% $9,206.0 $11,438.1 2.06x 2.06x 2.00x 7.6x 8.2x 8.1x 14.3x 11.5x 11.4x 6.6% 1.8x Moneygram
International Inc. $21.09 18.0% $1,222.4 $2,067.4 1.43x 1.40x 1.30x 5.2x 7.0x 6.6x 9.3x 16.8x 14.5x 13.6% 1.2x
Mean $18.88 17.5% $5,214.2 $6,752.8 1.75x 1.73x 1.65x 6.4x 7.6x 7.4x 11.8x 14.2x 12.9x 10.1% 1.5x
Median $18.88 17.5% $5,214.2 $6,752.8 1.75x 1.73x 1.65x 6.4x 7.6x 7.4x 11.8x 14.2x 12.9x 10.1% 1.5x
(1) LTM as of September 30, 2013 or as otherwise indicated (2) LTM as of June 30, 2013
(3) LTM as of August 31, 2013
Financial Technology Sector – December 2013
Financial Technology Sector Market Analysis 21
Payment Processing
($ in millions)
Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
Cielo SA $29.01 1.8% $22,791.4 $23,652.5 8.04x 7.56x 6.86x 15.1x 13.7x 12.4x 20.5x 19.8x 17.2x 7.3% 2.7x Alliance Data Systems
Corporation $242.26 4.8% $11,801.2 $19,992.9 4.82x 4.64x 4.20x 16.1x 14.6x 13.0x 25.6x 24.6x 20.1x 15.2% 1.6x Total System Services,
Inc. $31.05 1.5% $5,892.7 $7,110.9 3.54x 3.35x 2.81x 15.1x 11.4x 9.3x 24.9x 18.2x 15.3x 11.5% 1.6x Global Payments Inc.(2) $63.05 2.2% $4,595.7 $5,408.5 2.24x 2.21x 2.06x 10.5x 10.8x 9.8x 23.0x 16.3x 14.8x 11.0% 1.5x
Vantiv, Inc. $30.30 2.6% $4,401.2 $6,368.7 5.61x 5.45x 4.95x 12.0x 10.9x 9.8x 36.2x 19.6x 16.4x 15.0% 1.3x Wirecard AG $37.48 5.3% $4,205.4 $3,956.1 6.15x 6.08x 5.10x 24.9x 23.4x 18.8x 51.6x 36.6x 28.8x 22.0% 1.7x Euronet Worldwide Inc. $48.45 1.1% $2,435.5 $2,444.2 1.76x 1.72x 1.58x 14.0x 12.3x 10.7x 37.2x 24.8x 21.1x 13.8% 1.8x EVERTEC, Inc. $22.07 16.3% $1,808.4 $2,475.8 6.98x 6.91x 6.48x 18.4x 13.9x 12.6x 50.0x 15.2x 13.1x 17.0% 0.9x Heartland Payment
Systems, Inc. $44.91 1.6% $1,656.1 $1,742.1 2.99x 2.90x 2.71x 11.4x 11.5x 10.3x 23.1x 20.0x 18.1x 16.4% 1.2x Optimal Payments Plc(3) $5.46 4.5% $822.1 $705.4 3.24x 2.87x 2.55x NMF 14.0x 12.6x 74.1x 24.6x 22.9x 28.0% 0.9x
Global Cash Access
Holdings, Inc. $9.75 1.0% $638.3 $601.8 1.04x 1.03x 1.00x 9.4x 8.5x 8.3x 28.6x 12.6x 11.4x 13.3% 0.9x Net 1 Ueps Technologies
Inc. $8.19 58.7% $370.2 $411.2 0.89x 0.87x 0.82x 5.8x 5.0x 3.6x 16.8x 8.1x 6.1x NA NA
Mean $47.67 8.5% $5,118.2 $6,239.2 3.94x 3.80x 3.43x 13.9x 12.5x 10.9x 34.3x 20.0x 17.1x 15.5% 1.5x
Median $30.68 2.4% $3,320.4 $3,215.9 3.39x 3.13x 2.76x 14.0x 11.9x 10.5x 27.1x 19.7x 16.8x 15.0% 1.5x
Payroll/HR
($ in millions)
Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
Automatic Data
Processing, Inc. $80.02 4.7% $38,523.6 $40,206.7 3.49x 3.44x 3.21x 16.7x 16.9x 15.4x 29.0x 26.8x 24.3x 9.9% 2.7x Paychex, Inc.(3) $43.73 0.6% $15,970.0 $15,858.4 6.73x 6.65x 6.30x 15.5x 15.4x 14.4x 27.5x 27.3x 25.0x 10.8% 2.5x
Towers Watson & Co. $112.60 5.4% $7,985.8 $7,854.9 2.17x 2.22x 2.16x 12.0x 11.7x 11.0x 24.4x 19.3x 19.5x 9.8% 2.0x The Ultimate Software
Group, Inc. $156.69 4.0% $4,375.9 $4,283.4 10.96x 10.47x 8.52x NMF NMF NMF NMF NMF NMF 29.0% NA WageWorks, Inc. $57.30 3.5% $1,982.2 $1,702.6 8.07x 7.80x 7.09x NMF NMF NMF NMF NMF 66.6x 22.5% NA Insperity, Inc. $35.25 12.6% $901.3 $739.5 0.33x 0.33x 0.30x 8.5x 9.2x 7.8x 20.1x 25.5x 20.5x 15.0% 1.7x
Mean $80.93 5.1% $11,623.2 $11,774.2 5.29x 5.15x 4.60x 13.2x 13.3x 12.1x 25.2x 24.7x 31.2x 16.2% 2.2x
Median $68.66 4.3% $6,180.8 $6,069.1 5.11x 5.04x 4.75x 13.8x 13.5x 12.7x 25.9x 26.2x 24.3x 12.9% 2.2x
(1) LTM as of September 30, 2013 or as otherwise indicated (2) LTM as of August 31, 2013
(3) LTM as of June 30, 2013
Financial Technology Sector
–
December 2013
22 Financial Technology Sector Market Analysis
Prepaid
($ in millions)
Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P LT Growth Rate 2013E
Green Dot Corporation $24.25 9.7% $905.9 $629.3 1.09x 1.10x 1.00x 7.9x 6.0x 4.9x 20.3x 20.3x 16.8x 20.0% 1.0x Higher One Holdings,
Inc. $9.84 24.9% $459.1 $556.5 2.72x 2.66x 2.41x 10.9x 11.6x 9.6x 20.4x 17.9x 15.6x 20.3% 0.9x
Mean $17.05 17.3% $682.5 $592.9 1.91x 1.88x 1.71x 9.4x 8.8x 7.2x 20.4x 19.1x 16.2x 20.1% 0.9x
Median $17.05 17.3% $682.5 $592.9 1.91x 1.88x 1.71x 9.4x 8.8x 7.2x 20.4x 19.1x 16.2x 20.1% 0.9x
Security
($ in millions)
Enterprise Value/Revenue Enterprise Value/EBITDA Price/Earnings Ratio PEG Ratio
Public Company Stock Price 12/01/13 Change Since 52-Wk High Market Cap. Enterprise Value LTM(1) 2013E 2014P LTM(1) 2013E 2014P LTM(1) 2013E 2014P
LT Growth
Rate 2013E
Symantec Corporation(2) $22.49 20.5% $15,653.8 $14,020.8 2.04x 2.08x 2.08x 7.4x 6.9x 6.4x 20.0x 12.5x 12.3x 8.2% 1.5x
CA Technologies $33.00 1.1% $14,892.0 $14,007.0 3.04x 3.08x 3.10x 8.8x 7.8x 8.4x 16.7x 10.9x 12.8x 11.0% 1.0x Check Point Software
Technologies Ltd. $61.86 2.3% $12,151.5 $11,930.4 8.67x 8.58x 8.10x 15.5x 14.6x 13.8x 23.7x 18.2x 17.1x 9.2% 2.0x Trend Micro Inc. $39.14 4.2% $5,199.0 $4,485.7 4.22x 4.27x 4.12x 12.5x 13.3x 12.7x 28.8x NA NA 12.7% NA Fortinet Inc. $17.10 48.2% $2,795.2 $2,650.6 4.50x 4.39x 3.87x NMF 20.7x 17.4x 51.4x 37.1x 30.5x 18.6% 2.0x Imperva Inc. $44.98 16.9% $1,122.8 $1,050.3 8.28x 7.68x 6.12x NMF NMF NMF NMF NMF NMF 25.0% NA
Mean $36.43 15.6% $8,635.7 $8,024.2 5.12x 5.01x 4.57x 11.0x 12.6x 11.7x 28.1x 19.7x 18.2x 14.1% 1.6x
Median $36.07 10.6% $8,675.3 $8,208.1 4.36x 4.33x 3.99x 10.7x 13.3x 12.7x 23.7x 15.3x 14.9x 11.9% 1.7x
(1) LTM as of September 30, 2013 or as otherwise indicated (2) LTM as of September 27, 2013
Financial Technology Sector – December 2013
Financial Technology Sector Market Analysis 23
Valuation by Sector
Median 2013E Price/Earnings Multiples
Median 2013E Price/Earnings to Growth (“PEG Ratio”)
Note: Data represents global sector averages
Sources: Capital IQ and FactSet Research Systems, or Wall Street Market Research data as of December 1, 2013
26.3x 26.2x 24.2x 22.6x 21.8x 21.7x 20.5x 19.7x 19.1x 17.9x 15.3x 14.2x Fleet Processing / Technology Payroll / HR Bank Technology Investment Services Software & Technology ATM Processing / Payment Enablers Card Networks Data / Analytics Payment Processing
Prepaid BPO Security Money
Transfer 1.6x 2.2x 1.5x 1.7x 1.4x 1.5x 1.7x 1.5x 0.9x 1.1x 1.7x 1.5x Fleet Processing / Technology Payroll / HR Bank Technology Investment Services Software & Technology ATM Processing / Payment Enablers Card Networks Data / Analytics Payment Processing
Prepaid BPO Security Money
