Mastercard: Buying Recorded Future for $2.65 Billion

Mastercard announced that it will acquire Recorded Future for $2.65 billion. Recorded Future is a cyber defense company with 1,900 customers across 75 countries. Mastercard believes the addition of Recorded Future will add to its fraud prevention capabilities. Controlling fraud within its payment networks is an ongoing issue for Mastercard, so investing in this area seems appropriate. Due to its wide moat, we don’t think Mastercard needs to be aggressive in terms of mergers and acquisitions, but smaller deals like this that add certain capabilities make sense, in our view. However, the deal is not large enough to have a material impact on our $465 fair value estimate, which we maintain. We see Mastercard’s shares as fairly valued at the moment.