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TransactionWatchWeekly Newsletter For Payments Executives That Covers The Most Important And Relevant Merchant Acquiring Deals And Activity
Week of:
April 6th – April 10th
This report is based upon information considered reliable by The Strawhecker Group® (TSG), but the accuracy and completeness of such information is not guaranteed or warrantedto be error-free. Information provided is as reasonably available, not to be deemed all inclusive. TSG assumes no obligation to update the content hereof. This report is subject tothe terms and conditions of a separate license with recipient, is further protected by copyright under U.S. Copyright laws and is the property of TSG. Recipient may not copy,reproduce, distribute, publish, display, modify, create derivative works, transmit, exploit, or otherwise disseminate any part of this report except as expressly permitted underrecipient’s license with TSG. The Strawhecker Group (TSG) is not endorsed, sponsored by, or in any other way affiliated with any companies identified in this presentation. Thetrademarks of third parties displayed herein are the property of such parties, and, are provided merely for identification purposes. TSG claims no rights therein. This document hasnot been prepared, approved or licensed by any entity identified in this report.© Copyright 2020. The Strawhecker Group ®. All Rights Reserved.
M&A activity remained soft within the payments industry this week as the COVID-19 pandemic continued to impact the market. Several acquisitions have occurred throughout the week, signifying the ongoing adjustments certain firms are making to ensure profitability in the long run even during the current volatile economic environment. For instance, SoFi announced their intensions to acquire Galileo Financial Technologies in a stock and cash deal totaling approximately$1.2 billion. This acquisition suggests SoFi is focusing on the development of their consumer financial offerings as a large influx in individuals around the world seek venues for loan assistance due to economic effects from COVID-19.
In certain cases, ongoing terms are being renegotiated and shifting towards establishing future performance goals to ensure buys are not over-valued at the time of the closure of the deal. This tactic helps firms alleviate some attributes of future risks while warranting their acquisition targets are receiving fair and competitive offers.
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*As of publication.Note: TSG’s selected M&A activity monitors specific markets relating to the acquiring industry and the general payments market.
Deal Activity SummaryApril 6th – April 10th
This Week’s M&A OverviewTable of Contents
Deal Activity Summary
COVID-19 Industry Impact
Historical M&A Tracker
Headline News
Partnership Activity
Management Changes
TSG Payments Index
TSG Buy/Sell Services
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
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June July Aug Sept Oct Nov Dec Jan 2020 Feb Mar Apr*
2020/2019 M&A Activity – Year to DateBreakout by Transaction Category
ISO (Independent Sales Organization) ISV (Independent Software Vendor)
Gateway Other (Includes notable deals that TSG deems significant)
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As the world faces the continuously evolving COVID-19 pandemic, TSG is here to help support our clients by providing valuable information as it relates to COVID-19’s impact on the merchant
acquiring industry. In order to help keep our readers well-informed about this ongoing crisis and how it relates to the payments market, below are this week’s essential news stories.
COVID-19 Industry ImpactApril 6th – April 10th
Visa Foundation Pledges $210M For COVID-19-Stricken BusinessesPYMNTS | April 6th, 2020The Visa Foundation announced that it is pledging $210 million to fund two different programs that will support small and micro enterprises that have been financially disrupted due to the coronavirus pandemic. Money from the Visa Foundation will offer capital to non-government organizations (NGOs) and investment partners that assist small and micro-businesses.
Jack Dorsey Creates $1B COVID-19 Relief Fund Using Square EquityTechCrunch | April 7th, 2020Jack Dorsey announced in a series of tweets today (April 7th) that he is shifting $1 billion in his Square equity to create a fund dedicated to COVID-19 relief. The Twitter and Square CEO is calling the fund Start Small and posting a tally of disbursements and recipients in a public spreadsheet.
Mastercard Pledges $250M In Help For Small BusinessesPYMNTS | April 7th, 2020Recognizing that Main Street is being hard hit by the coronavirus pandemic, Mastercard committed $250 million over the next five years to support small-to-medium-sized businesses (SMBs), according to a press release. The announcement came during the virtual America CARES Small Business Relief event hosted at the White House on Tuesday afternoon (April 7th).
Fed Modifying Asset Cap So Wells Fargo Can Make More Small Business LoansReuters | April 8th, 2020The U.S. Federal Reserve said on Wednesday (April 8th) it would “temporarily and narrowly” modify the growth restriction on Wells Fargo & Co’s balance sheet, allowing the bank to make more loans under government assistance programs for small businesses hurt by the coronavirus disruption.
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
Transaction Category
Buyer SellerPurchase Amount
($ million)Date
Gateway Harbour & Hills Global Envoi - 4/8/2020
Other SoFiGalileo Financial
Technologies$1,200 4/7/2020
ISO Celero Commerce FlashBanc - 4/7/2020
ISO VizyPay Echo Daily - 4/2/2020
Other Brex Neji - 3/24/2020
Other Brex Compose Labs - 3/24/2020
Other Brex Landria - 3/24/2020
ISV Fiserv Bypass Mobile - 3/18/2020
Other Accuity Apply Financial - 3/12/2020
ISO Nets Polskie ePlatnosci (PeP) $439 3/11/2020
Other InterPayments SurchX - 3/6/2020
Other Mastercard RiskRecon - 4
Transaction Categories:
ISOIndependent
Sales Organization
ISVIndependent
Software Vendor
Gateway OtherIncludes notable deals that TSG
deems significant
Historical M&A TrackerTransaction History: December 2019 – March 2020
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
Transaction Category
Buyer SellerPurchase Amount
($ million)Date
ISV Mindbody ZeeZor - 3/4/2020
ISO Fiserv MerchantPro Express - 3/3/2020
ISV RevSpring Loyale Healthcare - 3/3/2020
Gateway Checkout.com ProcessOut - 2/26/2020
ISO Santander Elavon Mexico $85.7 2/24/2020
Other Intuit Credit Karma $7,100 2/24/2020
ISO Ally Financial CardWorks $2,650 2/18/2020
Other LendingClub Radius Bancorp $185 2/18/2020
ISV Flywire Simplee - 2/13/2020
Other Klarna Moneymour - 2/12/2020
ISO REPAY Ventanex $50 2/10/2020
Other Square Dessa - 2/7/2020
Other Intercontinental Exchange Bridge2 Solutions - 2/5/2020
ISO Australis CapitalPaytron Merchant
Services- 2/4/2020
Other Worldline Ingenico $8,600 2/3/2020
Other Accenture Mudano - 2/3/2020
ISOCornerstone Payment
SystemsMove Your Mountain - 1/31/2020
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Historical M&A TrackerTransaction History: December 2019 – March 2020
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
Transaction Category
Buyer SellerPurchase Amount
($ million)Date
Other WEX eNett; Optal $1,700 1/24/2020
Other RS2 Kalicom Kassen System - 1/23/2020
ISV DNA Payments Zash AB - 1/17/2020
Other Far Point Acquisition Global Blue $2,600 1/16/2020
ISVGoldman Sachs Merchant
BankingAptos - 1/13/2020
Other Visa Plaid $5,300 1/13/2020
Other PayU PaySense $185 1/10/2020
ISV Nets Poplatek - 1/9/2020
ISV MTBC CareCloud - 1/8/2020
ISV Lightspeed Gastrofix $100+ 1/7/2020
Other Mastercard RiskRecon - 12/23/2019
Other NCR Zynstra $129 12/23/2019
ISO Lovell Minnick Partners Fortis Payments - 12/17/2019
Other DeluxeFiserv
(Remittance Solutions assets)- 12/17/2019
ISV Rev19 PayK12 - 12/16/2019
Other Great Hill Partners VersaPay $95.6 12/13/2019
Other Payoneer Optile - 12/10/2019
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Historical M&A TrackerTransaction History: December 2019 – March 2020
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
EC sets sights on Mastercard's Nets dealFinextra | April 8th, 2020Mastercard's EUR2.85 billion acquisition of Nets' account-to-account payment business is being assessed by the European Commission on competition grounds after six countries raised concerns about the deal. Mastercard agreed last August to buy the business, comprising the clearing and instant payment services, and e-billing software of Nets’ Corporate Services business.
Bank of America sees booming rescue loan demand, with applications for nearly 10% of programCNBC | April 6th, 2020Bank of America said Monday (April 6th) that it’s seen fierce demand for emergency rescue loans with current applications already accounting for nearly 10% of the entire amount allocated by Congress. The bank confirmed that it has received applications from 177,000 small businesses for a total of $32.6 billion in financing. The current Bank of America numbers are its applications and do not represent the sums the Small Business Administration has approved.
After Strong First-Quarter Growth, the Coronavirus Takes the Steam Out of the ACHDigital Transactions | April 9th, 2020Like other payment networks, the automated clearing house was going great guns until mid-March, but thanks to the Covid-19 pandemic it’s now in the midst of a slowdown. ACH governing body Nacha reported Thursday (April 9th) that total volume rose 7.1% year-over-year in the first quarter to 6.4 billion transactions, up by 423 million payments. Same-day volume jumped a full 42% to 75 million transactions from 52.7 million in 2019’s first quarter.
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Headline NewsApril 6th – April 10th
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
Visa announced this week their strategic investment in open banking and compliance platform, Railsbank, which recently picked up $10 million in a Series A funding round in September of 2019. As part of their new investment into the company, Visa has entered into a five-year partnership with Railsbank which will support their growth across the Southeast Asia region. Additional, Railsbank has also been named a Visa “principal issuing” member by joining Visa’s Fintech Fast Track program. This will ultimately help Railsbank’sBanking as a Service (BaaS) products develop and expand throughout Asia.
eBay and Shopify expanded upon their existing partnership to enable retailers in Germany to sell products directly on eBay using a Shopify account. eBay and Shopify first established this partnership engagement back in 2017, which at the time gave Shopify merchants access to more than 170 million buyers on eBay’s platform. This partnership expansion into Germany will likely prove to be beneficial to both parties as it will allow Shopify retailers further access to eBay’s large customer base, which has over 18 million users in Germany alone.
Other Notable Partnerships:• NCR Corp. partners with NYMBUS on SBA Paycheck Protection loans.• Trintech partners with Sage on developing data integration for faster financial close processes.• Repay Holdings partners with TurnKey Lender on loan acceptance payments.
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Partnership ActivityApril 6th – April 10th
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Date Announced
Company Personnel New Position Previous Position
4/6/2020 Chip Philip Wright CFO CFO at Auto Service Finance
4/7/2020 IBM Howard Boville Head of Cloud Business CTO at Bank of America
4/9/2020 Payroc Paul Vienneau CTO CTO at TSYS
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Payroc names Paul Vienneau as the company’s new Chief Technology OfficerPayroc announced Thursday April 9th the appointment of Paul Vienneau as the company’s new CTO. Paul comes to Payroc from TSYS, where he served as the company’s CTO of Merchant Solutions since 2012. Payroc currently serves more than 55,000merchants and processes $23 billion in annual payment volume.
Management ChangesApril 6th – April 10th
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
$-
$100
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$400
$500
$600
$700
Q12011
Q2 Q3 Q4 Q12012
Q2 Q3 Q4 Q12013
Q2 Q3 Q4 Q12014
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TSG Payments IndexQ1 2011 – Q1 2020
VS.
TSGPX S&P 500
$521
$195
+20% CAGR
+8% CAGR
Payments companies have been thriving in recent years and are becoming more valuable and profitable for the company and its investors. With strong earnings year after year, many payments companies are rapidly increasing their market capitalization and gaining the attention of additional stakeholders.
The chart displays the performance of a $100 investment in an index of selected payments companies which represent the “TSG Payments Index” – this index is calculated on a value weighted basis using market capitalization and is compared to the S&P 500 which is also calculated using the same methodology. A $100 investment in the TSGPX in Q1 2011 would be valued at approximately $521 in Q1 2020, as compared to $195, if invested in the S&P 500.
On average, payments companies grow at a compounded rate that is 12% higher than that of the industry average. This growth rate is more than double of the industry average and represents the attractiveness of the payments market. The Payments Index is depicted to portray the growing nature of the payments market and hints at where this market is headed in the coming years.
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
*Drop in value from Q4 2019 to Q1 2020 is attributed to thevolatility and uncertainty caused by the ongoing COVID-19 pandemic
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Buy-Side• Buyers use TSG’s due-diligence subject matter experts for support on a variety of key decision
criteria can affect the value of the property. TSG assists buyers by acting as their advisor as they evaluate the financial value, benchmarking key performance metrics, determine risk, and evaluate the value of any technology assets.
Sell-Side• The key factor in a successful asset sale is understanding the true value of your enterprise. Value is
defined as the “amount a buyer is willing to pay.” TSG has a pulse of the market and performs an extensive evaluation of value drivers to ensure potential “sellers” understand the value of their company in the marketplace – prior to starting the sales process. In addition, buyers can use the data to assess offers that have been received for an accurate and fact-based assessment of the offer.
Private Equity• TSG can help private equity firms understand the landscape before investing and can build a market
analysis to determine which investment is the best fit to create the highest ROI. TSG provides investors and financial institutions with the documented valuation information needed to support funding events.
Restructuring & Re-Capitalization • TSG can facilitate strategic exercises to help forge a new path ahead and can help with
implementation of a new structure to ultimately maximize the value and performance of the entity.
30+ACQUISITIONS
AND INVESTMENT
TRANSACTIONS
250+COMPLETED
PAYMENTS CO.
VALUATIONS
8 of 12OF THE LARGEST
PAYMENTS TRANS
IN THE LAST YEAR
$10-100MTYPICAL DEAL
RANGE
TSG Buy/Sell Consulting Services
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
TSG Buy/Sell Consulting Services
In its sale to
TSG Has Advised For Many Leading Companies in the Payments Industry
In the acquisition of
In the acquisition of
In its Merger with
In the acquisition of
&
In its sale to
On their funding event with
On their funding event with
In the acquisition of
In due diligence support of its investment into
In its recapitalization of
In a merchant portfolio purchase from
In its merger with
On their investment in
In the acquisition of
In acquisition of the operation assets of
In the acquisition of
In the acquisition of
On the organization of its joint venture with
On their joint venture with
17CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.
ANALYTICS + CONSULTINGThe Strawhecker Group (TSG) is a fast-growing analytics and consulting
firm. The company serves the entire payments ecosystem, from fintech
startups to Fortune 500 companies. The firm provides its clients with
advisory services, research and analytics to help them plan and execute
their strategic initiatives. Based in Omaha, a recognized payments industry
hub, TSG is an established leader in this high-growth, ever-evolving space.
1,000+Clients advised,
including many in the Fortune 500
40+Of the top 50 merchant acquirers served, including 9 of the top 10
23+ YearsAverage
Associateexperience in the
payments industry
3.7+ MillionCard-accepting merchants in TSG’s AIM analytics platform, driving millions of dollars in ROI for its users
250+Completed payments company valuations; as well as ~30 buy/sell/investment advisements
