New Review of Payments M&A Transactions Finds Substantial Growth in the Industry

July 23, 2013 – The Strawhecker Group (TSG), a management consulting company focused on the payments industry, has accumulated an internal database of merchant acquiring acquisitions. Data on 80 transactions closing between 2000 and 2012 indicate that the average net revenue multiple lies around 3.3x and has been trending up in recent years after hitting a trough in 2010 due to the recession. Click here to see the analysis.

According to TSG there are numerous drivers behind transactions, which impact valuations. Multiples lying well below the average, in the bottom 25th percentile, for example, typically are static portfolios with a limited or non-existent distribution channel, above average attrition, or no merchant account portability. Conversely, transactions with multiples lying well above the average carry various tangible and intangible assets creating an array of strategic value for an investor or buyer.

Characteristics of transactions in the upper percentiles often include assets such as a proprietary technology and widespread distribution channels, two of the keys to success in the acquiring sector of the payments industry. Strong sales forces, niche market penetration, and operational scale also accompany above average transaction multiples. These attributes can significantly increase the strategic value to a buyer.

TSG has unparalleled experience in determining these value driving characteristics, click here for more information. 

[spacer height=3] [divide] [spacer height=3] The Strawhecker Group (TSG) is a management consulting company focused on the payments industry. The company specializes in providing financial institutions, issuers, merchant acquirers, card associations, processing companies, large merchants, and the investment community with advisory services to maximize their growth and profitability. TSG is also a resource of payments industry research, benchmark studies and developing trends. For more information please call 402-964-2617 or click vwww.TheStrawGroup.com.