Do strategic acquirers pay more than private equity in SaaS? No. The data we site are all acquisitions of publicly traded software companies going back to 2021. This data is pure: these transactions are all cash, the financials are public and audited, and these are all control transactions.
Of the 53 transactions shown, 68% were done by private equity. Additionally it shows the revenue multiples paid are largely similar: the median multiple paid by strategics was 7.5x while the median of private equity was 7.1x.
The average multiple paid by strategics at 9.5x is materially higher than the 7.7x average paid by private equity. However it should be noted that data includes Salesforce’s outlier acquisition of Slack in January 2021, which was done at 33x. If we exclude that outlier, then the average paid by strategics falls to 8.0x, which is identical to the 7.7x paid by private equity.
In summary, you’re more likely to sell to private equity (68% versus 32%), and the multiple paid will likely be in line with that of a strategic. The raw data is below.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Other resources we’ve built for founders include: SoftwareMultiples.com; softwareMRRcalculator.com; FounderInvited.com, and TwoFoundersTalk.com. Founders are always welcome to reach out to sammy@blossomstreetventures.com as well.
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