Prices in 2018 are also the greatest across this time frame. At EV/TTM earnings multiples over 10 , just two acquisitions have been consummated before 2018. Six of the seven acquisitions have gone at 20x + at three and 10x +. It’s astounding.
Another week! This time SAP has agreed to buy Qualtrics for $8B. Qualtrics is a Utah. Qualtrics sells and writes software to ask questions of customers and employees to help companies enhance customer experience, employee satisfaction goods, and manufacturer. Qualtrics had intended to go public. The company had grown 27% yearly and made $342M in the last twelve months.
Last November, a year ago, I estimated the latent purchasing power of this program ecosystem to be approximately $30B, excluding debt. I was off by a factor of two.
The shift to the cloud has happened at a scale that was larger than most legacy applications businesses estimated. And they are currently spending to catch up. Amongst acquirers IBM, Microsoft and SAP have invested the most: $25B+ each. A single company was acquired by IBM. Microsoft bought LinkedIn and Github. 5 companies: Ariba Concur, Qualtrics, Successfactors were purchased by SAP.
Qualtrics brought 23x trailing twelve months revenue multiple. This is the second biggest one of those I have monitored. The only one higher is that the Microsoft/Github acquisition, that can be based on press reports of Github&rsquo. Every one of the other data points is substantiated through public investor disclosures. It’s largest ever software acquisition was backed by VC. Congratulations to the Qualtrics team!
We’re bound to see more.
Let’s put the 2018 acquisition surroundings into circumstance. It’s the market for $ 1B + earnings with six in the last seven decades. 2012 witnessed 3 acquisitions. Additionally, $ 60B, more than double 2016, which included the Microsoft/LinkedIn merger is exceeded by 2018 acquisition worth for this kind of acquisition.