Equiteq reviewed M&A and investment trends in the increasingly disrupted financial technologies and services industry.
A broad range of technological innovations have transformed the financial services industry in the last five years. Alternative lending platforms, cryptocurrencies, robo-advisers and AI technology as well as other solutions have changed the landscape of the market. According to PwC’s Financial Services Technology 2020 and Beyond, 81% of banking CEOs are concerned about the speed of technological change. Traditional financial services players view the rise of fintech and challenger banks as a threat to their market share.
Expansion of Financial Technology and Services
From banking to payments, fintech has managed to dramatically transform the financial services industry. Customer empowerment initiatives continue to be an overarching theme in the market giving customers access to previously restricted assets and services, while emerging innovations have allowed financial institutions to access new data sets. The urge for companies to implement new fintech technologies has spread globally – adoption in 2019 grew almost four times more than in 2015, according to EY’s Global FinTech Adoption Index 2019.
Through the innovation of financial technology and services, Equiteq has acknowledged the following outcomes:
Equiteq reviewed M&A and investment trends in the expanding supply chain management industry.
According to Research and Markets, analysts estimate the total addressable market for all Supply Chain Management (SCM) solutions to reach $22.7 billion by 2022 – growing at a CAGR of 12.6% since 2019. Industry growth is being driven by digital and data-driven technologies that continue to significantly transform SCM. SCM services and systems integrators (SIs) will become ever-increasingly important strategic players for large enterprise customers to enable this transformation.
Enterprise adoption of SCM platforms has undergone
significant disruption during the past decade
Core SCM systems have shifted to the cloud with new disruptive cloud solutions being offering by the likes of SAP, Oracle and JDA Software. Analysts expect supply chain operations to keep expanding in both scope and sophistication. This will put pressure on SCM services firms and SIs to meet the demands of increasingly complex clients. The capture and analysis of data generated along the value chain will also remain a critical component of SCM process design and management. Firms with the ability to deliver data-driven SI services and drive adoption of tech-enabled supply chain management have increased EBITDA multiples 18.5% on average over their legacy counterparts.
Major deals profiled include Stone Point Capital and Further
Global Capital Management’s acquisition of Duff & Phelps, CGI Group’s purchase
of Meti and ICF’s acquisition of Incentive Technology Group.
Equiteq advised The
Shelby Group on its sale to WestView Capital Partners and Choice Financial Solutions
on its sale to Raisin.
The Equiteq Knowledge Economy
Share Price Index rose over the month.
& Phelps receives fresh investment from Stone Point Capital and Further
Global Capital Management.
& Phelps is a US-headquartered provider of
valuation, corporate finance and regulatory consulting services.
Buyers: Stone Point Capital and Further Global Capital Management are US-headquartered providers of investment capital.
Deal value: $4.2bn
Deal insight: Duff &
Phelps has received fresh capital from Stone Point Capital and Further Global
Capital Management to enable the next phase of its growth. Duff & Phelps
has c.3,500 professionals located throughout offices in the Americas, Europe
and Asia. The firm’s longstanding client relationships include nearly 50% of
the companies in the S&P 500, 65% of Fortune 1000 companies and 70% of
top-tier private equity firms, law firms and hedge funds.
Permira continues to hold a
significant stake in the business as part of the consortium. Permira had acquired
Duff & Phelps from Carlyle at the end of 2017. The deal valued Duff &
Phelps at $1.75bn, implying a c.2.5x valuation multiple on FY16 revenue. The
acquisition marked Permira’s eighth investment in the financial services
industry and netted Carlyle 2.4x its investment, according to a report from The
Wall Street Journal. During the hold period, Permira was able to partially
enable the growth of the business through organic initiatives and also through acquisitions
including Kroll in 2018 and Prime Clerk in 2019.