TransactionWatch, Week of April 13th – April 17th, 2020 (The Strawhecker Group)
Summary
TransactionWatch, a weekly newsletter for payments executives published by The Strawhecker Group, covering merchant acquiring deals and activity for the week of April 13th - April 17th, 2020. The deal activity summary reports a slowdown in new deals as the COVID-19 pandemic affects the merchant acquiring industry, and notes that Stripe announced an extension of its Series G round raising an additional $600 million. A COVID-19 industry impact section collects news items, including reports that PayPal, Intuit and Square were approved to participate in the Small Business Administration's Paycheck Protection Program. The newsletter also carries a historical M&A tracker listing transactions from December 2019 through April 2020 with buyer, seller, category and purchase amount, followed by headline news and descriptions of the firm's consulting services.
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TransactionWatch Week of:
Weekly Newsletter For Payments Executives That Covers The Most Important April 13th – April 17th
And Relevant Merchant Acquiring Deals And Activity
This report is based upon information considered reliable by The Strawhecker Group® (TSG), but the accuracy and completeness of such information is not guaranteed or warranted
to be error-free. Information provided is as reasonably available, not to be deemed all inclusive. TSG assumes no obligation to update the content hereof. This report is subject to
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Deal Activity Summary
April 13th – April 17th
This Week’s M&A Overview
Table of Contents
The ongoing extent of the COVID-19 crisis continues to hit the merchant acquiring
Deal Activity Summary industry this week as a slowdown in new deals have been apparent. Many PE
firms and acquirers are taking a step back in making acquisitions for the time
COVID-19 Industry Impact being as it may prove to be too high of a risk. As a large portion of the country’s
Historical M&A Tracker retail and restaurant establishments remain close, many payment processing
providers are taking a hit to their revenue which is hindering their movement
Headline News towards pursuing acquisition targets.
Partnership Activity
While many PE firms and acquirers are making necessary shifts in their operations
Management Changes and investments during this time, some are seeking additional capital to pursue
future growth targets. This week Stripe announced an extension to their Series G
TSG Payments Index funding round and pulled in an additional $600 million from investors. The
TSG Buy/Sell Services eCommerce market is proving to be a more important area for payment
processors as the shift from in-store transactions to online continues to ramp up,
however, consumers are becoming more wary of their financials during this
current economic environment which is impacting their spending habits.
2020/2019 M&A Activity – Year to Date
Breakout by Transaction Category
6
4
2
0
June July Aug Sept Oct Nov Dec Jan 2020 Feb Mar Apr*
ISO (Independent Sales Organization) ISV (Independent Software Vendor)
Gateway Other (Includes notable deals that TSG deems significant)
*As of publication.
Note: TSG’s selected M&A activity monitors specific markets relating to the acquiring industry and the general payments market.
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 2
COVID-19 Industry Impact
April 13th – April 17th
As the world faces the continuously evolving COVID-19 pandemic, TSG is here to help support
our clients by providing valuable information as it relates to COVID-19’s impact on the merchant
acquiring industry. In order to help keep our readers well-informed about this ongoing crisis and how
it relates to the payments market, below are this week’s essential news stories.
Paypal, Intuit & Square Approved To Offer Loans To Small Businesses Through Coronavirus Relief Program
TechCrunch | April 13th, 2020
Fintech companies have been lobbying for weeks to be able to participate in the U.S. government’s emergency
lending program for small businesses. Now those efforts have paid off, as PayPal, Intuit and Square have all been
approved to participate in the U.S. Small Business Administration’s (SBA) Paycheck Protection Program, which
provides aid in the form of forgivable loans for small businesses that keep all employees on their payroll for at
least eight weeks.
Wells Fargo Debit/Credit Purchases Down as COVID-19 Hits
PYMNTS | April 15th, 2020
Wells Fargo’s first-quarter results showed the impact of reduced customer spending amid the continued impact of
the coronavirus, and reserves taken in anticipation of loan losses. Earnings per share were a penny, where the
Street had expected 38 cents. The bank’s net income came in at $563 million in the quarter, where it had been
$5.9 billion in the same period a year ago. Consolidated revenues slipped 18 percent year over year to $21.6
billion and consensus expectations had been $19.4 billion.
Temenos Helps US Banks And Credit Unions To Respond To Surging Demand For Emergency Loans
Finextra | April 16th, 2020
Temenos, the banking software company, announced today (April 16th) that its Temenos Infinity digital
omnichannel product is enabling US banks and credit unions to accelerate loan applications to small businesses
under the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP).
IRS Has Sent First Round Of COVID-19 Stimulus Payments
PYMNTS | April 13th, 2020
Coronavirus stimulus payments to individuals are on their way. The Internal Revenue Service (IRS) said via Twitter
on Saturday (April 11) that it has issued the first stimulus checks to bank accounts and more money will be
coming soon, Newsy reported on Monday (April 13th).
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 3
Historical M&A Tracker
Transaction History: December 2019 – March 2020
Transaction Categories:
ISO ISV Gateway Other
Independent Independent Includes notable deals that TSG
Sales Organization Software Vendor deems significant
Transaction Purchase Amount
Buyer Seller Date
Category ($ million)
Gateway Harbour & Hills Global Envoi - 4/8/2020
Galileo Financial
Other SoFi $1,200 4/7/2020
Technologies
ISO Celero Commerce FlashBanc - 4/7/2020
ISO VizyPay Echo Daily - 4/2/2020
Other Brex Neji - 3/24/2020
Other Brex Compose Labs - 3/24/2020
Other Brex Landria - 3/24/2020
ISV Fiserv Bypass Mobile - 3/18/2020
Other Accuity Apply Financial - 3/12/2020
ISO Nets Polskie ePlatnosci (PeP) $439 3/11/2020
Other InterPayments SurchX - 3/6/2020
Other Mastercard RiskRecon -
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 4
Historical M&A Tracker
Transaction History: December 2019 – March 2020
Transaction Purchase Amount
Buyer Seller Date
Category ($ million)
ISV Mindbody ZeeZor - 3/4/2020
ISO Fiserv MerchantPro Express - 3/3/2020
ISV RevSpring Loyale Healthcare - 3/3/2020
Gateway Checkout.com ProcessOut - 2/26/2020
ISO Santander Elavon Mexico $85.7 2/24/2020
Other Intuit Credit Karma $7,100 2/24/2020
ISO Ally Financial CardWorks $2,650 2/18/2020
Other LendingClub Radius Bancorp $185 2/18/2020
ISV Flywire Simplee - 2/13/2020
Other Klarna Moneymour - 2/12/2020
ISO REPAY Ventanex $50 2/10/2020
Other Square Dessa - 2/7/2020
Other Intercontinental Exchange Bridge2 Solutions - 2/5/2020
Paytron Merchant
ISO Australis Capital - 2/4/2020
Services
Other Worldline Ingenico $8,600 2/3/2020
Other Accenture Mudano - 2/3/2020
Cornerstone Payment
ISO Move Your Mountain - 1/31/2020
Systems
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 5
Historical M&A Tracker
Transaction History: December 2019 – March 2020
Transaction Purchase Amount
Buyer Seller Date
Category ($ million)
Other WEX eNett; Optal $1,700 1/24/2020
Other RS2 Kalicom Kassen System - 1/23/2020
ISV DNA Payments Zash AB - 1/17/2020
Other Far Point Acquisition Global Blue $2,600 1/16/2020
Goldman Sachs Merchant
ISV Aptos - 1/13/2020
Banking
Other Visa Plaid $5,300 1/13/2020
Other PayU PaySense $185 1/10/2020
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
Fiserv
Other Deluxe - 12/17/2019
(Remittance Solutions assets)
ISV Rev19 PayK12 - 12/16/2019
Other Great Hill Partners VersaPay $95.6 12/13/2019
Other Payoneer Optile - 12/10/2019
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 6
Headline News
April 13th – April 17th
Stripe Extends Series G Funding Round
Stripe Newsroom | April 16th, 2020
Stripe, which builds economic infrastructure for the internet, announced today (April 16 th) an extension of
its Series G round, raising an additional $600 million from investors including Andreessen Horowitz,
General Catalyst, GV, and Sequoia. The financing takes place on the same terms and valuation as the Series
G. With more than $2 billion on its balance sheet, a capital-efficient business model, and a highly-
diversified, growing, global user base, Stripe is in a position to both provide uninterrupted service to its
users in a time of stress and invest in long-term improvements.
Chase’s Merchant Volume Rose 5% Despite a ‘Tale of Two Cities’ First Quarter
Digital Transactions | April 14th, 2020
JPMorgan Chase & Co., parent company of the nation’s biggest bank-owned merchant acquirer, managed
to pull off a 5% increase in processing volume in the first quarter despite the restrictions on economic
activity that took force in many states in the second half of March to control the Covid-19 pandemic. The
New York City-based banking firm on Tuesday (April 14th) reported merchant-processing volume of $374.8
billon versus $356.5 billion a year earlier. And sales volume on the bank’s credit cards—Chase is the
nation’s largest general-purpose card issuer—plus its debit cards rose 4% to $266 billion.
Pandemic Hits U.S. Bancorp’s Merchant Revenues and Raises T&E-Related Expenses
Digital Transactions | April 15th, 2020
U.S. Bancorp’s big payments operation that includes merchant acquirer Elavon Inc. is usually a reliable
revenue generator, but the bank-holding company’s exposure to the big downturn in travel-and-
entertainment and business spending because of the Covid-19 pandemic became evident in the first
quarter. Merchant payment volume declined 4.8% to $104.7 billion from $110.1 billion a year earlier,
Minneapolis-based U.S. Bancorp reported Wednesday (April 15th).
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 7
Partnership Activity
April 13th – April 17th
Global Payments and CaixaBank announced this week their expanded joint venture in the European
Economic Area. Through this joint venture, Global Payments and CaixaBank are partnering on launching a
European prepaid card, called MoneyToPay. Under this joint venture, Global Payments will own 51% of the
new brand, while CaixaBank Payments & Consumer will retain the remaining 49%. This new joint venture
initiative is not the first between the two firms. Back in 2010 the two payment companies collaborated on
creating Comercia Global Payments.
KyckGlobal and Visa announced a collaboration on expanding the availability of push payments across the
United States. Through this relationship, push payment will become more widely accessible primarily
within the commercial sector. Visa’s already existing real-time push payments solution, Visa Direct, will be
leveraged and designed specifically for SMBs and consumers. This partnership will ultimately help grow the
use of push payments beyond person-to-person transactions and more into the commercial space.
Other Notable Partnerships:
• Worldline partners with Meniga on increasing digital customer engagement through personalized
online banking features.
• Hi-Pay partners with ACI Worldwide on creating Mongolia’s first payments gateway service.
• Mastercard’s Ethoca unit is partnering with Microsoft on digital receipts when consumers make
purchases at Microsoft using their banks’ mobile app.
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 8
Management Changes
April 13th – April 17th
Jamie Iannone Becomes eBay Inc.’s New Chief Executive
Officer
eBay named Jamie Iannone as the company’s new CEO, effective
April 17th, 2020. Mr. Iannone comes to eBay after previously
serving as COO of Walmart’s eCommerce division. In addition, he
has also been appointed to the company’s Board of Directors.
Date
Company Personnel New Position Previous Position
Announced
Priority EVP Strategic Initiatives at
4/10/2020 Anthony Bonventre Executive VP of Operations
Technology Priority Technology
Priority Head of M&A and Strategic Managing Director at Priority
4/10/2020 Ranjana Ram
Technology Initiatives Technology
Priority Corporate Controller and Chief
4/10/2020 Pamela Tefft
Technology Accounting Officer
4/13/2020 eBay Jamie Iannone CEO COO, Walmart eCommerce
Managing Director and Chief
4/14/2020 Wells Fargo Julia Bates Technology Control Executive Control Manager at JPMorgan
Chase & Co.
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 9
TSG Payments Index
Q1 2011 – Q1 2020
*Drop in value from Q4 2019 to Q1 2020 is attributed to the
volatility and uncertainty caused by the ongoing COVID-19 pandemic
$521 $700
VS. +20% CAGR
$600
$500
TSGPX S&P 500
$400
$195 $300
$200
+8% CAGR $100
$-
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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 $521 in Q1 2020, as compared to $195, 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.
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 10
TSG Buy/Sell Consulting Services
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+ 250+
ACQUISITIONS COMPLETED
AND INVESTMENT PAYMENTS CO.
TRANSACTIONS VALUATIONS
8 of 12 $10-100M
OF THE LARGEST
TYPICAL DEAL
PAYMENTS TRANS
RANGE
IN THE LAST YEAR
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 11
TSG Buy/Sell Consulting Services
TSG Has Advised For Many Leading Companies in the Payments Industry
In its In the In the In the In its
sale to acquisition of acquisition of acquisition of Merger with
&
In its On their funding On their funding In the In due diligence support
sale to event with event with acquisition of of its investment into
In its In a merchant portfolio In its On the organization of On their
recapitalization of purchase from merger with its joint venture with investment in
In the In the In acquisition of the In the On their joint
acquisition of acquisition of operation assets of acquisition of venture with
CONFIDENTIAL. FOR INDIVIDUAL USE ONLY. @ COPYRIGHT 2020. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED. 17
ANALYTICS + CONSULTING
The 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.
40+ 250+
Completed payments
Of the top 50 merchant acquirers company valuations; as well
served, including 9 of the top 10 as ~30 buy/sell/investment
advisements
1,000+ 23+ Years 3.7+ Million
Clients advised, Average Card-accepting merchants in TSG’s
including many in Associate AIM analytics platform, driving
the Fortune 500 experience in the millions of dollars in ROI for its users
payments industry
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