8 factors driving software valuation multiples
Public software company valuations have risen to astronomical levels in recent years. Valuations for small privately held software businesses are strong as well and can vary significantly from one transaction to the next. What drives a 2x revenue multiple vs. a 10x revenue multiple? Some key factors influencing transaction multiples include: Size: larger companies […]
How has the COVID-19 pandemic changed the deal process?
It’s been remarkable to see the rebound in deal activity in the last few months and to observe the M&A process shift to virtual settings. A few things that we’ve observed: Most or all of the deal process can be done remotely. Most meetings can be done over videoconferencing, and most diligence can be done […]
Counting the Cash: Deals in Medical Revenue Cycle Management Ticking Up
Medical revenue cycle management is a little known (to the public) business service that involves helping healthcare professionals get paid. It includes software to automate the process of submitting claims, as well as service providers, who ensure that every claim contains the appropriate service code and diagnosis code to maximize reimbursement. While there aren’t typically […]
So you say you are a market leader?
Really? Oh, come now… in every press release I ever saw the company says they are the market leader, but in what? Market-share? Revenue or installed base? Technology perhaps? And in who’s eyes; besides your own? And why is this really important anyway? Well it IS important, and it is important because often success begets […]
Valuing the intangibles: What’s Your Company Really Worth?
A trusted advisor has suggested you meet with an investment banker. You respond, “I’m focused on growing my business…not selling it. Besides, investment bankers are in interested closing fees and not much else. The last banker I met summed up my company’s value at 3-5x EBITDA based on a quick 5-minute glance at my financial […]
The Battle for BOM Control and its Impact on Mergers and Acquisitions in Manufacturing Automation
For years the big PLM and their ERP counterparts have been battling it out for control of the company master Bill of Material (BOM). ERP vendors have traditionally owned the Manufacturing BOM; PLM the Engineering BOM; leaving the end user to determine who owns the master. In our recent white paper that initiated coverage of […]
Multiple Mergers and Acquisitions Drive CAM Market consolidation – Finally!
There have been a number of us over the years that were wondering when it would happen. When would CAM finally consolidate into a few major players from the literally dozens of small companies servicing the market, much the same as CAD and PDM before it? As recently as 2006, there was no dominant player […]
Recurring revenue counts in industries far beyond software
The recurring revenue (“RR”) business model gets a lot of attention in software M&A and growth investment, and for good reason. Most growing subscription/ software-as-a-service (SaaS)-based software companies trade in the public markets for north of 6x revenue and many of those fortunate few with annual revenue growth over 40% trade for over 10x revenue. […]
