The shift into the cloud has happened at a scale that was greater than most legacy applications companies estimated. And they are currently spending to grab. IBM acquired RedHat, a single firm. Microsoft bought LinkedIn and Github. 5 companies: Ariba, Callidus, Concur, Qualtrics, Successfactors were purchased by SAP.
Another week! Qualtrics is a Utah. Qualtrics writes and sells applications to ask questions of customers and employees to help businesses enhance worker satisfaction products customer experience, and manufacturer. This past week qualtrics had intended to go public. The company had increased 27 percent yearly and made $342M in the previous twelve months.
Costs in 2018 are the greatest across this time period. At EV/TTM earnings multiples over 10 , only two acquisitions were consummated before 2018. In 2018, six of seven acquisitions have gone off at three and 10x + at 20x +.
Let’s put the 2018 acquisition environment. It’s the very best M&A marketplace to get $ 1B + earnings with six in the last seven decades. 2012 seen 3 acquisitions. Additionally, 2018 acquisition values for this type of acquisition exceed $60B, over double 2016, which included the Microsoft/LinkedIn merger.
Qualtrics fetched 23x trailing twelve months earnings multiple. This is the second largest. The only one greater is that the Microsoft/Github acquisition, that is based on media reports of Github’s earnings. Each of the data points is substantiated through public investor disclosures. It’s largest ever software purchase was backed by VC. Congratulations to the Qualtrics team!
Last November, a year ago, I estimated that the latent buying power of the software ecosystem to be approximately $30B, excluding debt.