SaaS acquisition multiples ~8x

Sammy Abdullah
3 min readSep 14, 2023


Alongside multiples of publicly traded SaaS companies, public SaaS acquisitions are some of the most relevant you can look at for deriving SaaS revenue multiples. These transactions are all cash, the financials are public and audited, and these are all control transactions so the data is about as pure as it gets. Below is the data for all public SaaS company acquisitions since 2021. We have updated the data to include the latest acquisition: Forgerock has been acquired by a private equity firm (Thoma Bravo).

27 exits. 27 public companies have been acquired since December 2020. Acquisitions of this size don’t happen often, however we note 9 of these acquisitions happened since November 2022, so the pace is picking up. Note that we have incomplete data for one of those companies (FireEye) because as part of the acquisition, a material subsidiary called Mandiant was spun-off ($400mm revenue of $941mm combined revenue), so we do not have all the data for FireEye as a standalone subsidiary.

Capped price. The median acquisition price of these companies was $6.2bln. There are only so many acquirers that can spend billions in cash and/or company stock to make acquisitions. Once you get to $5bln+ in valuation, the universe of corporate acquirers (Salesforce, Microsoft, Adobe) and private equity firms (Thoma Bravo, KKR, Vista, Clearlake, Fracnsico, Symphony) that can afford you shrinks, such that IPO becomes the primary viable option. And of course, SaaS IPO’s don’t grow on trees; there were 40 in 2021. There have been no SaaS IPO’s in 2022 and 2023 as the market is frozen; sellers can’t agree on valuation with institutional buyers that are needed to buoy an IPO. Internal down rounds and flat have been happening for all those bullshit “unicorns”.

7.9x median and 8.9x average. The businesses on median sold for 7.9x trailing twelve month revenue of $786mm with YOY growth of 19%. While that growth may sound low, it’s impressive for companies with nearly $1bln of revenue, so any multiple discount from slower growth should be offset by the premium these companies receive for size and the fact that these are control investments.

No burn. These companies don’t burn, but they also weren’t wildly profitable. On median, EBITDA margin was -4%. Profitability isn’t a requirement to get acquired, and these acquisitions fly in the face of “Rule of 40”, which we don’t believe is required.

Private equity is leading the way. Of the 27 acquisitions shown, only 5 were made by a strategic. All the rest were made by private equity, with Thoma Bravo making 7 of the acquisitions. Again, there are very few firms that can afford a multi-billion dollar acquisition. Not surprisingly, the highest multiple of the group is Salesforce’s, paying 33x revenue for Slack.

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