While valuation multiples vary by size, there exists a significant multiples difference among firms that provide accounting administration services based on their industry model category and financial comparables. Since 2012, based on a number of private and public sources, private company backoffice company deals values ranged from 0.5X to 4.3X EV/Revenue multiple.
Deal value multiples by industry model category
- Most accounting deals are priced 80 to 100% of annual revenues (source: AccountingToday.com) with a premium paid for outsourcing & managed solution providers with long-term contracts
- Professional services have historically traded at <1X revenue multiple
- Scaled outsourcing solutions have traded at >2X with a premium paid for industry centric, scaled assets >$25M with a portfolio of recurring managed solutions
Industry Landscape Overview