TransactionWatchWeekly Newsletter For Payments Executives That Covers The Most Important And Relevant Merchant Acquiring Deals And Activity
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Week of:
January 6th – January 10th
Example Edition
Lightspeed Invests Further Into Europe With Acquisition of German-based ISV, GastrofixIn their efforts to increase their presence in western Europe, Lightspeed POS Inc. announces the acquisition of Gastrofix, a growing cloud-based POS provider based in Germany. This acquisition will add more than 8,000 merchant locations to Lightspeed’s portfolio which already contains nearly 57,000 SMB retailers and restaurants worldwide.
This acquisition complements Lightspeed’s current array of products and services as it resembles their existing cloud-based POS solutions. The acquisition follows suite of Lightspeed’s 2019 acquisitions of iKentoo and Kounta which were both leaders in hospitality POS solutions in their respective countries. Lightspeed’s growth strategy through acquisitions will ultimately help the company grow and gain traction in a smaller amount of time across geographical locations.
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Table of Contents
Deal Of The Week
Notable Transactions
Historical M&A Tracker
Headline News
Partnership Activity
Management Changes
TSG Payments Index
TSG Buy/Sell Services
*As of publication.Note: TSG’s selected M&A activity monitors specific markets relating to the acquiring industry and the general payments market.
Deal of the WeekJanuary 6th – January 10th
TSG Deal of the Week
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June July Aug Sept Oct Nov Dec Jan 2020*
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)
Example Edition
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Deal AnalysisLightspeed’s complementary acquisition of Gastrofix aligns with the company’s previous acquisitions of iKentoo and Kounta in 2019. Lightspeed’s strategy is to grow fast in new markets through key acquisitions that have already obtained market share in their respective country.
Transaction DetailsDate Announced: January 6, 2020▪ ~$61 million in cash on closing▪ Issuance of 1,437,930 in subordinate voting shares
▪ Valued at $28.16 per share▪ Gastrofix employees can earn an additional $4 million in deferred
cash along with the issuance of 95,464 subordinate shares valued at $28.16 per share if various performance objectives are met
▪ An additional amount up to $10.6 million and 250,598 voting shares are payable to selling shareholders of Gastrofix
Weekly Notable TransactionsJanuary 6th – January 10th
Acquired
For a total consideration of
$100,000,000+
Acquired
Acquisition closed on
January 8, 2020
Deal AnalysisNets announced their acquisition of Poplatek, a payment service provider based in Finland, and their spin-off company Poplapay, a provider of payment terminal services. Poplatek and Poplapay employ approximately 40 individuals and have a combined annual revenue of around $5.5 million. Together these acquisitions help strengthen Nets’ in-store payment terminal services across their European operations.
Transaction DetailsDate Announced: January 9, 2020▪ Terms were not disclosed▪ Acquisition closed on January 8, 2020
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Example Edition
Transaction Category
Buyer SellerPurchase Amount
($ million)Date
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 $95.6 12/13/2019
Other Payoneer Optile - 12/10/2019
ISO Pineapple Payments Paystri - 12/4/2019
Other Mastercard RiskRecon - 12/23/20194
Transaction Categories:
ISOIndependent
Sales Organization
ISVIndependent
Software Vendor
Gateway OtherIncludes notable deals that TSG
deems significant
Historical M&A TrackerTransaction History: August 2019 – December 2019
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Example Edition
Transaction Category
Buyer SellerPurchase Amount
($ million)Date
ISV Sage CakeHR - 11/28/2019
Other PayPal Honey $4,000 11/20/2019
ISO Rev19 PurePayments - 11/19/2019
ISO Rev19 Renaissance Associates - 11/19/2019
Other NCR POS Solutions - 11/19/2019
Gateway Elavon Sage Pay $300 11/18/2019
Other EMLPrepaid Financial
Services$290 11/11/2019
Other Wirecard AllScore $80.1 11/5/2019
Other Global Payments Desjardins - 10/31/2019
Gateway BlueSnap Armatic - 10/30/2019
ISO BluePay, NxGen, PayScape PayRoc - 10/27/2019
Other Berkeley Pungle - 10/25/2019
ISO NxGen, Payscape BluePay Canada - 10/25/2019
Other Mastercard SessionM - 10/22/2019
Other Lightspeed Kounta $35.3 10/21/2019
ISO REPAY APS Payments $60.0 10/14/2019
Other NCR Midwest POS Solutions - 10/7/2019
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Historical M&A TrackerTransaction History: August 2019 – December 2019
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Trial Edition
Transaction Category
Buyer SellerPurchase Amount
($ million)Date
ISO C&H FinancialMann Merchant
Processing Systems- 10/3/2019
ISO Elavon Payius - 10/3/2019
ISO Rev19 Royal Merchant Services - 10/2/2019
ISO Rev19ValuPlus Merchants
Association- 10/2/2019
Other PayPal GoPay - 9/30/2019
Other EVO Payments Delego Software - 9/10/2019
Other Shopify 6 River Systems $450.0 9/9/2019
Other US Bank Talech - 9/9/2019
Other Kabbage Radius Intelligence - 9/3/2019
Other Payment Alliance Eclipse Cash Systems - 8/26/2019
Other CIT Group Mutual of Omaha Bank $1,000.0 8/14/2019
ISO REPAY TriSource Solutions $65.0 8/14/2019
Other Lavu Sourcery - 8/8/2019
Other Mastercard Nets $3,190.0 8/6/2019
Gateway KKR Heidelpay $668.0 8/5/2019
ISV DoorDash Caviar $410.0 8/2/2019
Gateway Zelis Payments RedCard Systems - 8/1/2019
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Historical M&A TrackerTransaction History: August 2019 – December 2019
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Example Edition
AmEx Moves Closer to Entering China’s $27 Trillion MarketBloomberg | January 8, 2020American Express Co. cleared a key hurdle in its bid to accessing China’s $27 trillion payments market after the central bank accepted its application to start a bank card clearing business. The People Bank of China made the announcement on its official WeChat account, without giving more details. The decision to accept the application signals that it’s moving closer to final approval.
PayPal Finalizes $4B Honey AcquisitionPYNMTS | January 6, 2020PayPal has completed a $4 billion deal — its largest to date — to acquire the shopping rewards platform Honey Science Corporation, PayPal announced Monday (Jan. 6). With Honey, PayPal is striving to revamp the shopping journey for its customers while upping eCommerce sales and shopper engagement for its merchants. Founded in 2012, Honey has grown from an eCommerce price-tracking tool to an expanded suite of services that include a shopping assistant and rewards program. With roughly 17 million active users each month and 30,000 diverse online retailers, Honey has delivered some $1 billion in savings to shoppers in the past year.
Clydesdale and Yorkshire Banks Hit by IT FailureThe Guardian| January 6, 2020Customers of Clydesdale and Yorkshire banks have become the latest customers to fall victim to an IT failure after wages and other payments failed to arrive in their accounts on Friday (Jan. 3). The group, which now includes Virgin Money, said it was conducting a “full investigation” after customers took to social media to complain their much-needed January wages had not arrived in their current accounts as expected.
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Headline NewsJanuary 6th – January 10th
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Example Edition
Elavon teams up with Mobeewave and Samsung to develop a digital merchant onboarding process for the newly launched Samsung point-of-sale app for the Canadian market. This new POS application will enable merchants in Canada to accept contactless payments through an NFC-enabled mobile device, without the need of additional dongles, card readers, or extra hardware. Elavon will ultimately assist with the onboarding and payment processing for Samsung’s POS application.
Through a partnership with Fiserv and ExxonMobil, Amazon’s Alexa voice assistant will be able to pay for fuel at Exxon and Mobil gas stations in the U.S. Demonstrated first at CES 2020, Alexa-enabled vehicles will allow drivers to say ‘Alexa, pay for gas’ and the assistant will be able to identify the station location and pump number. Using digital commerce technology from Fiserv, the pump will be activated and will transact the payment through the user’s Amazon Pay account.
Other Notable Partnerships:• Bankjoy partners with Zogo to provide a better member experience for credit union’s younger
customers.• Euronet Worldwide partners with Standard Chartered to offer DCC services at ATMs in 14 countries.• Sprint and Wirecard announce partnership to embed payment technology in IoT installations for
clients.• Tencent’s WeChat Pay and UnionPay partner on integrated QR code systems.
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Partnership ActivityJanuary 6th – January 10th
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Example Edition
Date Announced
Company Personnel New Position Previous Position
1/7/2020 DayTek Capital Paul Hanks Technology AdvisorChief Technology Officer and Co-Founder at Atom Bank
1/7/2020 Nacha Joe W. Hussey ChairmanCurrently the Managing Director at JPMorgan Chase
1/7/2020 Vesta Leo Khan Chief Marketing OfficerHead of Enterprise Marketing at Signifyd
1/7/2020Paramount
Management Group
Jim Weber Director of OperationsVP of Operations at Payment Alliance International
1/7/2020 Klarna Francine EreiraGeneral Manager for Australia and New Zealand
Executive at Walt Disney
1/8/2020 Citigroup David Chubak Head of U.S. Retail BankingHead of Global Retail Bank & Consumer Lending
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3C Payment announced that Michele Ferraris has stepped down as CEO and Tim Goodwin will be appointed as the company’s new CEO3C Payment announced on January 7th that Michele Ferraris has stepped down as CEO of the company. He will be succeeded by Tim Goodwin who has been COO of the company since 2016 and has held various roles at the company for 15 years.
Management ChangesJanuary 6th – January 10th
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Example Edition
$-
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$300
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Q12011
Q2 Q3 Q4 Q12012
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TSG Payments IndexQ1 2011 – Q4 2019
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VS.
TSGPX S&P 500
$649
$244
+23% CAGR
+11% 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 $649 in Q4 2019, as compared to $244, 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.
Example Edition
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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
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Example Edition
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
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Example Edition
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
Example Edition