QUARTERLY DEALS & MARKET UPDATE Evolve Monthly Ban · PDF file Evolve Capital...

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Transcript of QUARTERLY DEALS & MARKET UPDATE Evolve Monthly Ban · PDF file Evolve Capital...

  • Bank Technology / Solutions

    Specialized investment bankers at the intersection of finance and technology

    QUARTERLY DEALS & MARKET UPDATE

    July 2020

    Credit Scoring / Data

    Software Solutions / Services

    Blockchain

    Mortgage / Real Estate Tech

    Core Processing

  • Evolve Capital Partners; Deals & Market Update – Bank Technology / Solutions 2

    ABOUT EVOLVE CAPITAL PARTNERS

     Evolve Capital Partners (Evolve) is a specialized investment bank focused on businesses serving

    industries at the intersection of finance and technology.

     We are dedicated investment bankers focused on evolving industries, and we support sustainable growth

    through transformational M&A / financing transactions.

     Evolve is a dedicated, creative, and fully independent investment bank that advises private and public

    companies on merger, divestiture and acquisition transactions, and capital raising through private

    placements.

     We also provide structured financial advisory services — our investment banking practice provides a

    comprehensive suite of solutions to businesses.

     With over 30 engagements executed by its leaders, Evolve has served as a proud partner, bringing

    renewed value to companies at the intersection of finance and technology.

     Founded in 2012 and based in New York, NY.

    HIGH-TOUCH INVESTMENT BANKING

    Few investment banks have transaction experience across both corporate and asset finance.

    Our Clients Investment Banking Advisory

     Corporations  VC & PE Backed

    Companies  M&A

     Capital Raises and Asset

    Finance

     Management

    Teams

     Independent

    Directors / Boards

     Strategic

    Alliances

     Financial Restructuring

    Industry Focus

    Finance and Technology Firms

    Securities Specialty Finance Payments BPO

    Financial Services Enterprise Software Lending IoT

    Financial Management Analytics Insurance B2B

    Overview of Evolve Capital Partners

  • Evolve Capital Partners; Deals & Market Update – Bank Technology / Solutions 3

    Capabilities

    M&A Advisory

    Sales / Recaps

    Acquisitions

    Divestiture

    Strategic Advisory

    Financing

    Private Placements

    Debt Capital

    Restructuring

    Payments

    Bank Technology /

    Solutions

    BPO

    Enterprise Software /

    Data & Analytics

    Healthcare Tech Financial Management

    Solutions

    Specialty Finance /

    Alternative Lending

    Securities Insurance

    We Focus Exclusively on Finance and Technology-Related Firms

  • Evolve Capital Partners; Deals & Market Update – Bank Technology / Solutions 4

    47.1x

    41.7x

    39.5x

    30.1x

    15.9x

    Credit Scoring / Data

    Core Processing

    Blockchain

    Mortgage / Real Estate

    Tech

    Software Solutions /

    Services

    Industry Stock Market Performance of Evolve Sector Coverage

    Market Summary and Key Multiples

    Data as of July 1, 2020

    Source: Pitchbook

    Industry-wide Multiples and Subsector Multiples

    Sector 2021E Price / Earnings Multiples

    Bank Technology / Solutions

    2021E Price / Earnings Multiples

    Indexed Price Performance *

    Sector 3 Months 1 Year 3 Years

    Bank Tech / Solutions 45.0% 14.8% 50.1%

    BPO 29.6% (15.7%) 20.0%

    Enterprise Software / Data & Analytics 48.3% 15.0% 70.0%

    Financial Management Solutions 46.3% 20.5% 104.2%

    Healthcare Tech 35.2% 28.4% 36.2%

    Insurance 24.0% (11.2%) 12.2%

    Payments 60.0% 2.9% 76.4%

    Securities 24.7% (4.4%) 9.1%

    Specialty Finance / Alternative Lending 44.8% (24.0%) 1.3%

    * Equal weighting method.

    39.6x

    38.3x

    37.8x

    37.1x

    36.2x

    28.3x

    22.1x

    18.8x

    16.0x

    Payments

    Enterprise Software / Data

    & Analytics

    Financial Management

    Solutions

    Bank Tech / Solutions

    Healthcare Tech

    BPO

    Securities

    Insurance

    Specialty Finance /

    Alternative Lending

  • Evolve Capital Partners; Deals & Market Update – Bank Technology / Solutions 5

    Blockchain

    Growth Rates:

    Stock % of 52- Market Enterprise LTM Revenue: Earnings LTM Margins: EV / Revenue EV / EBITDA Revenue

    Price Wk. High Value Value Revenue EBITDA CY 2020 CY 2021 LT Gross EBITDA LTM CY 2020 CY 2021 LTM CY 2020 CY 2021

    Intel $58.81 84.9% $249,002 $268,118 $75,732 $37,420 0% 4% 31% 60% 49% 3.5x 3.8x 3.6x 7.2x 8.1x 8.0x

    PayPal Holdings $177.43 99.5% $208,300 $206,125 $18,262 $3,468 15% 14% 10% 44% 19% 11.3x 11.6x 10.2x 59.4x 42.7x 37.4x

    International Business Machines $118.54 74.7% $105,251 $162,969 $76,535 $15,612 (3%) (4%) (6%) 48% 20% 2.1x 2.1x 2.2x 10.4x 8.9x 9.5x

    American Express $94.05 68.1% $75,708 NA $30,994 NA 51% (14%) 6% NA NA NA NA NA NA NA NA

    MEAN 16% 0% 10% 50% 30% 5.7x 5.8x 5.3x 25.7x 19.9x 18.3x

    MEDIAN 8% (0%) 8% 48% 20% 3.5x 3.8x 3.6x 10.4x 8.9x 9.5x

    Source: Pitchbook

    Stock Comparables – Bank Technology / Solutions Sub-Sectors

    (All figures in millions of USD, except per share data. Data as of July 1, 2020)

    Core Processing

    Growth Rates:

    Stock % of 52- Market Enterprise LTM Revenue: Earnings LTM Margins: EV / Revenue EV / EBITDA Revenue

    Price Wk. High Value Value Revenue EBITDA CY 2020 CY 2021 LT Gross EBITDA LTM CY 2020 CY 2021 LTM CY 2020 CY 2021

    Fidelity National Information Services$136.86 86.5% $84,557 $103,576 $11,354 $3,546 22% 20% (47%) 36% 31% 9.1x 10.0x 8.3x 29.2x 24.6x 19.3x

    Fiserv $98.50 78.8% $65,944 $88,719 $12,454 $4,234 150% (4%) (4%) 46% 34% 7.1x 6.1x 6.3x 21.0x 21.6x 16.1x

    Jack Henry and Associates $183.83 94.3% $14,084 $14,030 $1,680 $553 4% 9% 5% 41% 33% 8.4x 8.8x 8.1x 25.4x 27.2x 25.1x

    Temenos $155.87 84.2% $11,060 $12,064 $958 $343 16% (3%) 9% 80% 36% 12.6x 12.3x 12.7x 35.2x 30.7x 28.4x

    Q2 Holdings $87.64 93.3% $4,663 $5,023 $337 ($41) 32% 25% NA 47% (12%) 14.9x 15.8x 12.7x NMF NMF NMF

    Oracle Financial Services Software $37.68 75.8% $3,239 $2,709 $683 $320 3% (13%) 8% NA 47% 4.0x 3.7x 4.3x 8.5x NA NA

    Bottomline Technologies $50.01 87.4% $2,197 $2,214 $440 $52 3% 5% NA 57% 12% 5.0x 5.2x 4.9x 42.3x 23.3x 24.6x

    Computer Services $53.49 97.3% $1,479 $1,417 $284 $89 NA NA 20% NA 31% 5.0x NA NA 16.0x NA NA

    GLORY $22.55 71.5% $1,370 $1,139 $2,061 $276 (5%) (5%) (2%) 39% 13% 0.6x 0.6x 0.6x 4.1x NA NA

    Silverlake Axis $0.17 41.6% $445 $312 $133 $57 (6%) 12% (26%) 62% 43% 2.4x 2.2x 1.9x 5.5x 5.2x 4.8x

    Intellect Design Arena $1.47 34.5% $194 $155 $196 $14 12% (18%) NA 28% 7% 0.8x 0.7x 0.8x 11.3x NA NA

    Crealogix Holding $99.87 80.5% $140 $132 $100 ($1) 5% 6% NA 22% (1%) 1.3x 1.2x 1.2x NMF 20.0x NA

    MEAN 21% 3% (5%) 46% 23% 5.9x 6.1x 5.6x 19.9x 21.8x 19.7x

    MEDIAN 5% 5% 1% 44% 31% 5.0x 5.2x 4.9x 18.5x 23.3x 22.0x

    Credit Scoring / Data

    Growth Rates:

    Stock % of 52- Market Enterprise LTM Revenue: Earnings LTM Margins: EV / Revenue EV / EBITDA Revenue

    Price Wk. High Value Value Revenue EBITDA CY 2020 CY 2021 LT Gross EBITDA LTM CY 2020 CY 2021 LTM CY 2020 CY 2021

    Fair Isaac $423.57 97.0% $12,285 $13,201 $1,226 $316 11% 5% 24% 71% 26% 10.8x 11.5x 10.9x 41.8x 38.5x 33.0x

    Equifax $173.57 96.4% $21,069 $24,250 $3,619 $828 3% 5% (21%) 57% 23% 6.7x 6.9x 6.6x 29.3x 20.6x 20.2x

    TransUnion $87.84 86.8% $16,672 $20,171 $2,724 $979 14% (2%) 27% 67% 36% 7.4x 7.6x 7.8x 20.6x 19.2x 21.0x

    Experian $35.39 93.6% $32,430 $36,573 $5,179 $1,620 NA (1%) (5%) 49% 31% 7.1x 7.2x 7.3x 22.6x 20.8x 20.9x

    Intrum $18.65 58.9% $2,260 $7,708 $1,696 $258 2% 5% NA 38% 15% 4.5x 4.9x 4.7x 29.9x 9.1x 12.4x

    MEAN 8% 3% 6% 57% 26% 7.3x 7.6x 7.4x 28.8x 21.6x 21.5x

    MEDIAN 7% 5% 10% 57% 26% 7.1x 7.2x 7.3x 29.3x 20.6x 20.9x

    Mortgage / Real Estate Tech

    Growth Rates:

    Stock % of 52- Market Enterprise LTM Revenue: Earnings LTM Margins: EV / Revenue EV / EBITDA Revenue

    Price Wk. High Value Value Revenue EBITDA CY 2020 CY 2021 LT Gross EBITDA LTM CY 2020 CY 2021 LTM CY 2020 CY 2021

    CoStar Group $718.63 96.2% $28,285 $27,261 $1,463 $432 17% 14% 44% 80% 30% 18.6x 19.6x 17.3x 63.2x 54.8x 54.7x

    Zillow Group $58.60 87.5% $12,994 $12,712 $3,415 ($168) 96% 32% NA 40% (5%) 3.7x 4.9x 3.7x NMF NMF NMF

    Black Knight (US) $72.78 93.5% $11,430 $12,999 $1,185 $528 6% 0% 9% NA 45% 11.0x 11.0x 11.0x 24.6x 22.3x 22.5x

    Fidelity National Financial $30.24 61.4% $9,042 $10,890 $8,359 $1,243 9% (13%) 13% NA 15% 1.3x 1.3x 1.5x 8.8x 6.6x 14.3x

    RealPage $65.47 93.8% $6,682 $7,757 $1,031 $220 13% 15% 27% 56% 21% 7.5x 7.9x 6.8x 35.3x 27.6x 26.3x

    CoreLogic $66.44 97.0% $5,276 $6,888 $1,788 $394 (2%) (1%) 4% 51% 22% 3.9x 3.9x 4.0x 17.5x 14.0x 12.7x

    Redfin $41.70 98.4% $4,107 $4,059 $861 ($60) 57% 7% NA 18% (7%) 4.7x 5.3x 5.0x NMF NMF NMF

    Real Matters $19.39 99.0% $1,647 $1,570 $412 $53 NMF NMF NA 33% 13% 3.8x 15.4x 6.9x 29.6x 55.0x 22.3x

    Stewart Title Guaranty Company $31.51 71.4% $746 $669 $1,981 $158 (0%) (6%) 15% NA 8% 0.3x 0.4x 0.4x 4.2x 3.9x 6.5x

    Altisource Portfolio Solutions $14.61 62.0% $227 $424 $600 $69 (24%) (38%) NA 23% 11% 0.7x 0.7x 1.1x 6.2x 6.