Strategic Acquirers don’t pay more

Do strategic acquirers pay more than private equity in SaaS? The data says ‘not really’. The data we track is all acquisitions of publicly traded software companies going back to 2021 because the data is pure: these transactions are all cash, the financials are public and audited, and these are all control transactions. Below is the data, and it shows of the 36 transactions, 69% were done by private equity. Additionally it shows the revenue multiples paid as largely similar: the median multiple paid by strategics was 9.3x while the median of private equity was 8.9x.

The average multiple paid by strategics at 12.8x is materially higher than the 9.2x average paid by private equity, but 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 10.2x, which is much closer to the 9.2x paid by private equity.

In summary, you’re more likely to sell to private equity, and the multiple paid will likely be in line with that of a strategic. The original data is below and note that all data excludes the 7 distressed/slow growth acquisitions in red.

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