Highlights from the Jeffries Enterprise Software Update, March 2011

Jeffries puts out a very nice enterprise software monthly update (with mile-long disclaimers and which does not seem to be freely distibuted on the Internet so I cannot link to it).

Nevertheless, I thought I’d share some of the salient highlights from this month’s version.

On M&A:

  • 7 M&A deals in February with consideration above $20M, flat year/year and up from 6 quarter/quarter.
  • Median adjusted price/revenue multiple of 2.4x, up from 1.8x year/year and 1.9x quarter/quarter.
  • TTM median adjusted price/revenue multiple of 3.0x, up from 2.3x year/year and flat quarter/quarter.

On public company valuations (enterprise value to TTM revenue multiple) by category:

  • Virtualization:  7.8x
  • SaaS:  5.8x
  • Healthcare IT:  5.1x
  • Human capital mangement:  4.9x
  • Enterprise content management:  4.2x
  • Data mangement: 3.9x
  • Business intelligence:  3.5x
  • Infrastructure software:  3.1x
  • Systems management: 3.0x
  • Security management:  2.2x
  • ERP:  2.1x

On recent IPOs (median of 8 recent, including Smart, QlikTech, IntraLinks, RealPage, SciQuest, ChinaCache, SkyMobi, and Velti):

  • Most recent quarter revenues:  $26.2M
  • Revenues (year of pricing):  $138M
  • Revenues (forward):  $189M
  • Annual estimated revenue growth:  23%
  • Operating margin:  16%
  • Forward net income:  $20.3M

On the IPO pipeline:

  • 34 companies
  • $6.2B in filings (in proceeds raised by the companies)
  • Filing size:  $182M mean, $100M median (amount proposed to be raised)
  • TTM revenues:  $575M mean, $148M median
  • 52 filings in 4Q10, down from 61 in 4Q09, and down from 63 in 3Q10, yet up from the dark days of 4Q08 (6) and 1Q09 (4)

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