What’s a scaled-up serial acquirer worth? Insights from 11 x $1B+ rollup exits

Greetings from the Basque Coast! The waves are massive. The people are beautiful. The tapas are delicious. Sitting on the beach, autumn seems very, very far away. 

We all better get a good rest because this autumn will be a busy one. Looking at our technology serial acquirer database - now almost 300 names long - we count approx. 20 PE owned software rollups slated for exit in the next 12-24 months. A few are $200-300M short in ARR - a gap which will be bridged mostly through M&A. 

The names are evenly distributed between Europe and North America. From conversations with PE principals we understand that exit valuations assume 7-8X revenue multiple, on an LTM basis. 

Considering what is happening in the public markets, is this assumption justified? 

You know we do not like speculation. Instead, we crunched the numbers on 11 scaled-up software and hosting serial acquirers. 7 in Europe and 4 in the US. All names where liquidity events took place in the last 3 years. We have looked at both majority and significant minority (20%+) deals. While the sample is by no means exhaustive, we believe it gives a good sense of the multiples pre & post market correction.  

We tallied up the data on the absolute scale; multiples achieved; and context for the following names:

• 2 European ERP rollups (Orisha and Forterro)

• 2 European hosting rollups (team.blue and group.one)

• Visma, a Norwegian rollup of accounting and payroll tools for SMEs

• IRIS, a British rollup of accountancy, payroll and HR tools

• Civica, another British rollup - of public sector software

• 4 US Vertical Market Software consolidators: IDERA, Aptean, Frontline Education and Therapy Brands

As a bonus, we spilled the beans on Insight’s challenged 2022 sale of Community Brands (which ultimately had a happy ending though!). 

In summary, the multiples achieved were these:

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