Contact: Scott Denne Jordan McKee
Payment-processing vendor ACI Worldwide preps for an uptick in fraud beyond the point of sale by picking up Retail Decisions for $205m. The acquisition is ACI’s priciest deal on record, following a general trend of higher multiples in the antifraud space.
Card-present point-of-sale fraud is expected to decrease in the US as credit card companies migrate to the EMV standard beginning in 2015, but fraud from card-not-present transactions, such as online and interactive-voice-response transactions, will likely grow. The trend has already played out in the UK and Canada, both of which have implemented the EMV standard. Retail Decisions’ expertise in e-commerce fraud detection and management will provide ACI and its merchant customers with an advantage as they go up against strong card-not-present headwinds in coming months.
ACI is willing to pay for that advantage. Prior to purchasing Retail Decisions at an enterprise multiple of about 4x revenue, the most ACI had paid was 2.1x in the $516m acquisition of S1 three years ago. Antifraud technologies have fetched high multiples over the past year in deals such as Experian’s purchase of 41st Parameter (14.1x), F5’s takeout of Versafe (43.9x) and IBM’s pickup of Trusteer (25.7x).
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