Thoma Bravo equity firm acquired anaplan for $10.700 billion. Shares of the financial planning software company had declined sharply in the past six months, likely giving the firm a buying opportunity.
The stock market hasn't been kind to SaaS companies in recent months, raising the question of whether this is the start of a trend of private equity targeting vulnerable SaaS companies.
To answer that, you can analyze the transaction of anaplan and better understand if Thoma Bravo is paying an additional premium for the company. From there, you can get an idea of how much they are willing to pay from private equity for new technology companies.
Then apply information gathered from a number of public SaaS companies that might be found answering calls from other private equity firms. We must not forget that private capital is more abundant than ever in terms of availability, and that money could be looking for a target.
Private equity firms seek strong market positioning and a large, valuable client base with room for growth, all of which modern cloud companies have in excess of.
inside the deal anaplan-Thoma Bravo anaplan said fourth-quarter revenue increased about 33% to $162,7 million, of which $148 million came from subscription sources, from the prior year. On a full-year basis, revenue was up just under 32%, meaning its growth rate in the fourth quarter was similar to its full-year result.
If we convert the company's fourth-quarter revenue to run-rate revenue, we can apply that figure (about $651 million) against its purchase price of $10,700 billion to get a revenue multiple of about 16,4x for the transaction.
Remember that we have seen declines in software company valuations to the point where SaaS companies growing at over 30% today have had their revenue multiples reduced to the mark by 12x when we compare revenue projections in the future with its current value. Compared to that number, the bid price of anaplan seems to be competitive.
Indeed, with Thoma Bravo paying a roughly 46% premium ($66 per share) for the software company's stock compared to pre-trade prices, the private equity firm is offering a price close to a quarter quarter of 2021 by anaplan. To be precise, the actions of anaplan they peaked at just over 66 per share in the last six months, right in line with Thoma Bravo's offer.
This provides a neat little framework to work with: software companies trading at depressed prices today could perhaps sell to private entities for their peak value in Q2021 XNUMX.
