Description

As technologies in the fintech industry have continued to evolve, so too has the M&A landscape in this sector. The fintech M&A landscape has entered a new phase that is no longer experimental. Instead, fintech technologies are essential, and deal making in this space is now centered on profitability, operational efficiency, and strategic consolidation.

Investors in fintech companies (e.g., banking organizations and private equity firms) typically have very different risk appetites and compliance expectations than do new, entrepreneurial fintech firms. These disparate cultures can have important impacts on legal, regulatory, and compliance aspects of fintech transactions.

Certain questions have particular importance when a fintech target is involved. Is the target's business subject to licensing? Are those licenses transferable? What are the required regulatory approvals for the transaction? Has the target operated its business consistent with the buyer's/investor's compliance and risk management standards? What are the parties' rights with respect to the underlying technology and intellectual property? Who controls the timing and terms of an exit transaction? Counsel must address these issues during due diligence and the transaction documentation process.

When more traditional institutions acquire/invest in fintech firms, a particularly important issue centers on the target's historical compliance efforts, its desire for flexibility, and the buyer's/investor's desire for internal controls. Traditional financial institutions, which must answer to regulators, may have a different tolerance for regulatory risk than the target they seek to acquire/invest in. Transactions in the fintech space may also involve important negotiations relating to employment and efforts of key persons or innovators at the target.

Listen as our authoritative panel examines issues particular to fintech M&A transactions. In addition to key deal terms and compliance matters, the panel will discuss how to resolve issues relating to retention of licenses, IP and talent, differences in culture, management control, and more.