is the average net revenue multiple from

~100 merchant portfolio/enterprise

transactions over the past 10 years

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Analytics Month

3.9

Overall, the multiples range from 1X to 7X – reflecting the basic

value components that make up the core value of any business.

WEEK 4: M&A

Note: Multiple is based on annual net revenue after residuals are paid

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WEEK 4: M&A Visit Payments

Analytics Month

Drivers of Merchant

Portfolio MultiplesMerchant, volume, and net revenue growth

Vertically Specialized and/or diversified merchants

Merchant, volume, and net revenue attrition

Unique technology/IP that adds value

Revenue/expense structure that drives profit

Large/small merchant concentration

is the average transaction value

increase across all industries in

the U.S. last year

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20%

Globally this number is at 9%

WEEK 4: M&A

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20+

the number of payments-related ISV purchases through Q3

is the number of publicized

ISO sales in the U.S.

&

WEEK 4: M&A

Public payments companies grow

at a compounded rate that is 13%

higher in comparison to the S&P 500.

FOR DISCUSSION PURPOSES ONLY. © COPYRIGHT 2019. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.

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13%WEEK 4: M&A

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Analytics Month

34%WEEK 4: M&A

of North American/European transactions,

across all industries in 2018, were completed

by private equity

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WEEK 4: M&A Visit Payments

Analytics Month

When looking at merchant portfolios,

buyers often focus on financial metrics:

Gross Revenue % of Volume – charged to merchantPrice

Profitability

Attrition & Growth

Total Net Revenue % of Volume – earned by acquirer/ISO

before downstream payments

Annual Account Attrition - % Merchant Accounts that

stopped processing and no longer generate revenue

Annual Volume Gross Attrition - % volume loss on

attrited accounts

Change in Retained Account Volume – annual volume

change in merchants retained

Annual Volume Net Attrition – Annual

FOR DISCUSSION PURPOSES ONLY. © COPYRIGHT 2019. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.

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Below is a sample of payments-related acquisitions/investments made over the last quarter:

FOR DISCUSSION PURPOSES ONLY. © COPYRIGHT 2019. THE STRAWHECKER GROUP. ALL RIGHTS RESERVED.

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Analytics MonthWEEK 4: M&A

TSG’s methodology behind valuing and assessing merchant portfolios:

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Contact us to learn more.

TSG Recently Advised

TSG Has Advised For Many Leading Companies in the Payments Industry

In the acquisition of

TSG Recently Advised

On their investment in

In a merchant portfolio purchase from

On their investment in In its merger with

On their fundingevent with

In the acquisition of

In its recapitalization of

In due diligence support of its investment into

On their fundingevent with

In its sale toIn its merger with

In the acquisition of

In the acquisition of

On their investment in

In acquisition of the operation assets of

In the acquisition of

In the acquisition of

On their investment in

With their joint venture with

On the organization of its joint venture with

&

In the acquisition of

In the acquisition of

In its sale to

TSG Has Performed Transaction Due Diligence:

&

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 7 of the top 10

23+ YearsAverage

Associateexperience in the

payments industry3.7+ 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