This week the industry’s leaders gathered at Dana Point, CA for ETA’s annual Strategic Leadership Forum (SLF). The Strawhecker Group, a Gold Sponsor of the event, had a large team present at the show. See below (and more here) for topics that were heard by the team.
M&A activity on a roll – a lot of discussions on how it impacts the industry and how players should react. It appears that the industry believes that this is gaining more traction.
Reasons for the heightened activity:
Higher valuations are pushing many leveraged FinTech companies to sell to take advantage of the current market
Large processing providers/acquirers are seeking accretive growth through more technical/repetitive processes versus human/relationship sales force – drive better margins through scalable technologies and lower the cost of sales.
The industry continues to generate a significant amount of operating cash flow, and have had the financials to leverage debt at a low cost of capital
The impression is that the investment community, which is driving the higher multiples for the top 100 acquirers, is “industry agnostic”. They see opportunities to make investments that will generate 30% returns based on market(ing) demand and not financial/operational performance.
M&A activity will remain very active through 4Q of 2017