Price for Private Messaging Firms Typically 2 to 4 Times Sales

When companies acquire a privately held messaging firm, what do they pay?

Most of the deals are two to four times the revenues of the 12 months' revenues prior to when the deal takes place.

Sometimes the price can be much higher. Eg, in July 2004, Symantec paid $28M for TurnTide. TurnTide had innovative anti-spam technology, 17 employees, and no revenues. Higher prices are generally associated with:

  • The buyer getting a lot of leverage from the deal
  • M&A negotiation experience on the part of the seller
  • Competing bids
  • The seller not being too hungry to get a deal

Author: David Ferris

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