Solving the Value Equation for B2B Technology, SaaS, Software, and Outsourcing Providers.
The primary valuation drivers for emerging fast growth B2B technology, SaaS, and outsourcing providers primarily include: a SWOT of the recurring revenues, operational & service delivery model KPIs (key performance indicators), and the assets and liabilities of the company.
B2B BPO Outsourcing Market Landscape and Valuations:
The outsourcing industry sectors are highly fragmented across regions and industries, rich in opportunities for consolidation and therefore attracting both private equity investment and increasingly active corporate and strategic buyers. Transaction multiples are currently pegged around 4-8X times EBITDA (pretax profit) and 2-5X times revenue multiple for deals greater than $20 million for technology based firms and 1X to 4X revenues for smaller, growth oriented labor intensive firms (based on Ephor Group deal sources for private company transactions and public sources for public company transactions).
BPO Outsourcing Valuation Comparables:
SaaS Valuations by Industry Sector:
By 2014, $1 of every $5 that will be spent on software will be spent on cloud or SaaS solutions.
Maximizing valuation and wealth creation “Yellow Brick Roadmap”:
2011 and 2012 saw a spike in revenue multiple valuations for SaaS and cloud software companies. In the future B2B technology, SaaS, and outsourcing companies that are growing aggressively with low customer acquisition costs and high retention rates with realize the highest revenue valuations.
Looking to increase your valuation? i.e. increase the value of your technology, SaaS, or outsourcing company?
For more information contact charles bedard at ephor [at] ephorgroup.com