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The first half of 2018 witnessed 141 Fintech M&A deals with a total disclosed transaction value of $39.3bn.

According to the latest Fintech M&A Market Report from international technology mergers and acquisitions advisers, Hampleton Partners, total first half deals are up 26% from the prior half year.

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The surge in transaction values is due to increasing acceptance of digital banking, payments and financial data services.

The number of deals also increased, up 8% from the second half of 2017.

Investments by private equity investors are up 30% compared with the same period two years ago, excluding the string of transactions by private equity-backed companies.

Machine learning, financial media, data solutions and payment processing companies fuel the biggest deals for the first half.

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Blockchain, insurtech and Europe’s Revised Payment Service Directive (PSD2) is expected to drive the next wave of fintech M&A.

Digital payments M&A on the rise

Digital payment and transaction processing deals account for two of the five biggest deals and continue to deliver high multiples. Paypal’s all-cash acquisition of payments provider, iZettle, at 19x trailing revenues resulted in a deal worth $2.2bn.

Another landmark deal was Worldline’s $2.75bn deal to snap up SIX group.

Jo Goodson, MD, Hampleton Partners, said:“Fintech M&A activity is coming of age. After the initial surge in somewhat random deal-making, corporate and financial buyers alike are chasing larger and more targeted investments. These can  help streamline back-office operations, improve the digital customer experience and cut costs.”

Largest H118 Fintech M&A deals

  • $17bn, Jan 2018, Blackstone acquires Thomson Reuters at 5.2x EV/S;
  • $5.2bn, Mar 2018, CME Group acquires NEX Group 7.0 x EV/S;
  • $5.06bn,Jan 2018, SS&C Technologies acquires DST Systems at 2.7 v EV/S;
  • $2.75bn, May 2018, Worldine acquires SIX Group;
  • $2.2bn, May 2018, PayPal acquires iZettle at 19.0 x EV/S