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.
- 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)