Digital Transactions Authoritative, insightful and timely information for payments professionals
By John Stewart
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Deals for financial and payments technology companies drove worldwide merger-and-acquisition activity in the technology sector to new highs in the second quarter, according to a report released on Thursday.
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Financial and payments technology were the object of some 60 deals in the quarter, with a total deal value of $8.7 billion. That activity helped drive total tech M&A to record highs, with $52.4 billion in total deal value on 872 transactions. “Financial technologies grew again as a target, especially for point-of-sale and mobile payments,” says the report, produced by EY, a global tax and transaction advisory firm.
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Transactions for payments and financial technologies firms was especially heavy in the second quarter. The quarter’s 60 deals exceeded the 2013 quarterly average of 40 by 50%, according to the report. And the deals’ dollar value in the quarter was 141% greater than last year’s quarterly average. Indeed, financial and payments transactions recorded the highest average deal value of the tech sectors EY measured, at $145 million.
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“No economy is complete without mechanisms for paying—which explains the continuous acceleration in deals targeting financial services technologies that we have seen for a year or so,” the report says.
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That soaring interest in payments and financial tech helped drive overall tech M&A deal volume to heights EY had not seen in the more than six years it has been producing the report. The 872 total tech deals is a record, EY says, and is up 15% over the first quarter and 39% from the year-ago period. Total deal value was down 21% from a record first quarter but up 57% over 2013’s second quarter.
Major payments-tech transactions concluded or announced in the quarter included Oracle Corp.’s deal for Micros Systems Inc. ($5.3 billion), Zebra Technologies Corp.’s pending acquisition of Motorola Solutions Inc.’s scanner business ($3,45 billion), and Vantiv Inc.’s purchase of Mercury Payment Systems LLC ($1.65 billion).
