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Leading Software Technology Bank with
Global Reach
Company Overview
May 2024
AGC Partners
1
AGC Powered Through The Headwinds– Hiring Up for Accelerating Market Momentum
(1) 451 Research deal count based on all SaaS related Sell-Side
transactions since 2010. Excludes co-managed deals.
3
17
37
56
66
83
103
131
155
186
207
235
263
295
327
356
391
413
453
495
523
’09
’03
’10
’04 ’05 ’06 ’07 ’08
’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22
$250M-$1B
<$100M
$100-$250M
36%
33%
31%
’23-’24
AGC Cumulative Deal
Count Since 2003
AGC Deals by Enterprise
Value Breakout
Powering through the headwinds
▪ 7 deals currently under LOI
▪ 65+ closed deals since 2022
▪ 45 active engagements
▪ 27 new engagements since
November
523 closed deals makes AGC
the top SaaS advisor and #1 in
closed tech sell side deals
Building in downturn
▪ 21 Partners and hiring
▪ 20+ new hires
in
’24
signed up for battle!
Celebrated our 20th year in
business in ‘23
AGC Mission: To Expand Our Lead in the Middle Market – More Flow and Knowledge Begets Better Client Outcomes
(2) 451 Research deal count based on all disclosed technology related
Sell-Side transactions from 2014-2024 YTD. Excludes co-managed deals.
Firm
# Trans.
1.
451 Research SaaS
Rankings(1)
186
1.
165
2.
127
3.
101
4.
99
5.
Firm
# Trans.
1. Raymond James
76
2. Raymond James
224
3. Houlihan Lokey
221
4. William Blair
216
5. Canaccord Genuity
215
257
. AGC Partners
Top Sell-Side Tech Deal
Makers Since 2014(2)
Median ARR multiple of 9x
on all deals since 2022
AGC Partners
2
AGC Kicks Off 2024 Strong With 6 Announced Deals
End-to-end supply
chain technology
has received a significant
investment from
has agreed to be
acquired by
Cloud-based travel
management systems
a portfolio company of
Michael Van Duijn
CEO
“The very professional AGC team, with
Dennis in front, navigated us smoothly
through
the
intense
investor
exploration process. The extensive
experience of AGC in the world of
private equity in combination with
their
rich
network
and
deep
understanding of our business and
markets, created the path for achieving
our desired outcome.”
Aaron Shepherd
Co-Founder & CEO
“The industry acumen that Jon and
Charlie brought to the table, their
strategic
foresight,
and
their
comprehensive understanding of legal,
financial, and tax issues served as the
cornerstone of a lucrative agreement
for myself, my
family, and my
stakeholders. We express our gratitude
for their dedication and needless to
say, we are thrilled with the outcome!"
has agreed to be
acquired by
Customer experience
management software
Cybersecurity risk,
tech, & networking
has received a strategic
investment from
Kair Kasper
Co-Founder & CRO
"What a ride. There were literally
countless of times when I thought back
to a few months ago when we were
discussing if it's even necessary to
work with an advisor and thinking how
grateful I am to have you on board.
Fred and the team got us to a signed
deal on what I'd say are excellent
terms. Thank you for that, I don't think
we would have landed here otherwise."
Larry Pfeifer
Founder
“We chose AGC due to their depth of
knowledge in our space as well as the
solid reputation for delivering results!
Their attention to every aspect of the
transaction and being able to view and
explain the process from a 360 degree
perspective was important to us as well
as operating with integrity. We could
have not picked a better partner to go
through this process with us.”
has been acquired by
Network Management
Software
Ted Helvey
CEO & Chairman
“I still remember when Jonathan
and Charlie took me to lunch
trying to convince me how
attractive they felt Nomadix and
GlobalReach would be to many
potential investors. When we
took the leap of faith to have
them
lead
us
through
a
confidential process, we did not
know where the journey would
lead.
In addition
to being
pleased with the results by
selling the companies at a high
valuation
to
a
prestigious
strategic buyer, we also learned
how important choosing the
right partner is for the journey.
Jonathan, Charlie, and their
amazing
team worked and
advocated
tirelessly on our
behalf at every stage of the
process. We cannot speak highly
enough
about what
AGC
Partners did to lead us through
to a successful transaction”
a portfolio company of
has been acquired by
Network Management
SaaS
a portfolio company of
AGC Partners
3
AGC Is All About The Results
Note: Apryse (fka PDFTron) acquired iText. All other clients were sell-side engagements.
Confidential Materials. Do Not Distribute.
Majority growth
investment from Thoma,
and the acquisition of
iText in 2022
Outcome
Engagement Summary
Growing 100%+,
PDFTron hired AGC to
run a quick and efficient
financing process. AGC
reached out to 7 of the
best investors and
secured 4 bids above
expectations. After
close, AGC maintained
the relationship and
advised PDFTron on a
buy-side engagement in
2022
Received a minority
growth investment from
Kayne Anderson and
CIBC
Outcome
Engagement Summary
Ran a dual-track
process for a leading
player in the multi-
cloud data
management category
which led to a valuation
at a 10% premium to
IOI bids; enabling them
to supercharge growth
ahead of a future
liquidity event for
management
Received a minority
growth investment at a
premium multiple from
Sapphire Ventures
Outcome
Engagement Summary
ActivTrak engaged AGC
to run an accelerated
growth equity process,
which resulted in 10+
submitted offers within
3 weeks of launch. With
the pressure of intense
competition, AGC
ultimately negotiated
exceptional terms for
ActivTrak
Received a minority
growth investment from
Riverwood Capital
Outcome
Engagement Summary
AGC launched a sell-
side process to a
diverse set of financial
sponsors, while also
launching to top
strategics to conduct a
market test. This
resulted in 15 IOIs, but
ultimately AGC stuck
with initial goal of a
capital raise and
negotiated optimal
terms in a turbulent
market
Acquired by NetApp at a
premium multiple amidst
the public markets being
in deep turmoil
Outcome
Engagement Summary
Brought on to raise
growth capital, AGC
launched to 30
growth investors
while managing select
strategic interest.
AGC drove 5 parties
to IOIs and LOIs and
leveraged the
competitive dynamics
to secure a premium
offer from a public
strategic
Raised their Series B at
at a premium multiple,
led by Craft Ventures
Outcome
Engagement Summary
AGC was engaged by
People Data Labs, a
pioneer in people data
growing ~90%, to
conduct a dual track
process that brought in
6 competitive bids and
a premium valuation
from elite growth and
venture investors
Received a growth
investment from TCV at
a high valuation
Outcome
Engagement Summary
Ran an expeditious dual
track process on the
back of inbound private
equity interest. After
advancing a group of
10 elite middle market
tech investors, the
Company chose TCV
for a majority
investment generating
substantial shareholder
value and allowing
leadership a second
bite at the apple
AGC Partners
4
AGC Has Strong Relationships With Most Tech PEs and Drives Premium Outcomes
Confidential Materials. Do Not Distribute.
15
Deals
Completed
5
Deals
Completed
6
Deals
Completed
6
Deals
Completed
10
Deals
Completed
7
Deals
Completed
Client
Investor
Client
Investor
(Litera)
(Planview)
(Apotheco)
(Access)
(IFS)
200+ Close Relationships with Leading
Growth Investors
Best Relationships: AGC has developed tight-knit
relationships with the key decision makers with virtually
all the growth investors through its 523 closed deals. As
demonstrated by all five of its conferences, AGC is close
to and brings together the top global PEs
Incredible Valuations: AGC generates exceptional
outcomes for its clients – 65+ closed deals since 2022
with a 9x median revenue multiple
Deep and Highly Tuned Execution: Over 20 years and
523 deals, AGC has built a repository of 100 proprietary
documents for A+ execution
Multi-Transaction, Long-Term Relationships: After
helping clients raise growth capital or complete a recap,
AGC maintains the relationship for an extended period to
help with buy-side M&A efforts as well as an eventual
resale of the business
AGC Partners
5
AGC’s Extensive Experience Selling To Top Public Strategic Acquirers
Confidential Materials. Do Not Distribute.
Select Public Strategic Partners – 100+ Deals in Total
Tech Titans
Cyber
Security
Infrastructure
Vertical
Software
Healthcare
Deep Market Intelligence: AGC gains unparalleled
sector knowledge from Partner-led published research
insights reports, AGC’s sector-specific conferences, and
extensive deal history—translating to a fundamental
understanding of strategics
AGC’s Crafted Approach to Strategic Buyers: AGC’s
approach to marketing and managing Strategics is
differentiated through high-touch, tailored interactions
with each party – a process that has been fine tuned over
20 years of experience and 100s of transactions with
strategic buyers
Experts in Creating a Must-Have Buyer Sentiment:
Generating buy-in from technologists is key to delivering
an exceptional outcome; AGC’s Partners are experts in
navigating complex organizations to create direct
engagement with the key decision makers
Creating Customized Divisional Analysis: Strategic
buyers, particularly in today’s world of dealmaking, need
to bring their CEO and board acquisitions that will bring
strategic incremental revenues, expanded TAM, and also,
accretion to earnings in the near-to-mid term
Senior Industry Relationships: As the most active
Technology-focused bank, AGC maintains constant
contact with a diligently-tracked list of top strategics,
providing deep insight into their acquisition roadmaps,
strategy, and potential synergies to maximize value
200+ Close Relationships with Top
Strategic Acquirers
AGC Partners
6
The Best Middle-Market Growth Technology Conferences Globally
▪ AGC Partners is one of the only investment banks to hold middle-market
industry conferences solely focused on driving relationships among strategic
acquirers, PEs, and emerging private growth companies spanning all major
tech sectors. At our Boston conference in September, we had nearly 2,000
one-on-ones
▪ Offers insights from leaders in their respective industries and direct
engagement with the most active investors in the space
▪
Includes 500+ early and growth stage technology companies (revenues $5-
$100M+ ARR) and 600+ private equity firms and strategic acquirers
▪ High caliber panels and 30-minute pre-arranged one-on-one meetings lead to
hundreds of new leads, several new engagements, and drive the marketing
efforts for pre-engaged clients
Premier Global Technology Conferences
Testimonials
“The single best use of time for making new, relevant contacts”
“This AGC event was perhaps the best such investor event I have attended in
a decade. The breadth of investor types, diverse perspectives, and opportunity
to meet other entrepreneurs was both impressive and beneficial”
Fantastic event! We always find a deal from the AGC Events!
Boston
September
2024
San Francisco
May 2024
Toronto
June 2024
Conference Final KPIs
Austin 2023
360
Total
Attendees
140
Fast-Growing
Private Tech
Companies
1,600
1-On-1
Meetings
160
Leading Tech PE and
Growth Investors
and Strategics
Boston 2023
Austin
December
2024
London
March 2024
Toronto 2024
250+
Total
Attendees
100+
Fast-Growing
Private Tech
Companies
1,000+
1-On-1
Meetings
100+
Leading Tech PE and
Growth Investors and
Strategics
Confidential Materials. Do Not Distribute.
525
Total
Attendees
175
Fast-Growing
Private Tech
Companies
1,935
1-On-1
Meetings
220
Leading Tech PE and
Growth Investors
and Strategics
September 19th, 2024
Indicates projected KPIs
December 3rd, 2024
June 20th, 2024
Indicates 2024 Conference Dates
Nashville 2024
125+
Total
Attendees
50+
Fast-Growing
Private Tech
Companies
600+
1-On-1
Meetings
75+
Leading Tech PE and
Growth Investors
and Strategics
San Francisco 2024
London 2024
300
Total
Attendees
140
Fast-Growing
Private Tech
Companies
1,400
1-On-1
Meetings
150
Leading Tech PE and
Growth Investors
and Strategics
500
Total
Attendees
175
Fast-Growing
Private Tech
Companies
1,500
1-On-1
Meetings
250
Leading Tech PE and
Growth Investors and
Strategics
May 6th, 2024
May 16th, 2024
March 22nd, 2024
Nashville
May 2024
AGC Partners
7
Deep Domain Knowledge: 270 Market Leading Private Tech Sector Reports
Confidential Materials. Do Not Distribute.
In an era marked by the convergence
of
digital
transformation, GRC
software has emerged as a catalytic
force in a fragmented and outdate
marketplace.
Innovative
GRC
solutions will play a major role in
transforming businesses in the future
Partner Led From Start to Finish
Vertical Software
Automotive
Building / Engineering
CRM / CXM
C-Suite
Education
Food/Restaurant
GovTech
Healthcare
HR Tech
Insurance
Legal
Public Sector
Real Estate
Travel & Leisure
Cybersecurity
APT
CASB
Cybersecurity
Endpoint
IAM
IOT / SCADA
Network
Security Orchestration
Security Services
Threat Intelligence
User Behavior Analytics
Vulnerability
Internet
AdTech
Augmented Reality
Consumer
E-Commerce
Food Tech
Gaming
Internet
Marketplaces
MarTech
Mobile
Social
Retail
Virtual Reality
Infrastructure
AI
BI / Analytics
Big Data
Cloud Computing
Communication
Data Center
DevOps
Energy & Industrial
ERP / Supply Chain
Internet of Things
IT Services
Mobility Solutions
Smart Cities
Storage
Selected Recent Partner-Authored Whitepapers
HCIT
Clinical Decision Support
Clinical Trials
Dental Solutions
EHR
Genomics Data Mgmt.
HIS
Payer Solutions
Pharma Analytics
PMS
Precision Medicine
RCM / Payment Solutions
Telehealth
▪ 270 industry thought pieces published by
AGC Partners covering Vertical Software,
Cybersecurity,
Infrastructure,
Internet,
HCIT, FinTech, and 60+ subsectors
▪ Partner-led and authored, with 6-person
AGC research team working on perfecting
each piece, going deep on the market, TAM,
key trends, challenges, M&A and financings
activity
▪ Developed and implemented 20 years of
proprietary processes and procedures that
will typically unearth 200-300 leading
private companies in each sector
FinTech & Payments
Blockchain
Digital Lending
FinTech Market Updates
Mobile App Monetization
Mobile Money
Payments
Remittance / Money
Transfer
GRC Software
Today, operators continue to face
significant macro challenges, even as
the
restaurant
ecosystem
has
normalized coming
through
the
pandemic. Tech adoption priorities
have shifted, as restaurants search
for efficiency.
Restaurant Technology
Adoption of digital first, patient
facing
technology
accelerated
dramatically out of necessity during
COVID and isn’t going anywhere, as
patient preferences have shifted,
leading to emerging technologies
that now empower patients.
Patient Facing Technology
Industry Leading Research Covering the Most Coveted Private Sectors of Technology
With 5,000 active Tech PE portfolio
companies and another 80K VC-
backed companies, 2024 will be a
year of capitulation characterized by
a
return
to
fundamentals and
increased deal making.
Tech PE Year-End Report
Technologies
like
AI,
Edge
Computing, and IoT took the main
stage in 2023, as the transition to
the cloud and SaaS by supply chain
firms continues to be a major growth
driver of the ever-growing market.
European Supply Chain
In a landscape characterized by
resilience, the DACH Tech M&A
arena has witnessed an impressive
surge, breaking records in 2022 and
2023.
Despite
digitalization
challenges,
industry
giants
are
embracing digital startups.
DACH Technology Report
AGC Partners
8
Strong Experience Across Various Sectors
HCIT & Life Sciences
Hugh Hoffman; Michael
Howe; John Tinkham
DevOps
Sean Tucker; Rob Buxton;
Fred Joseph; Michael Howe
EdTech
Steve Willis; Sean Tucker; Ben
Howe
Infrastructure & Cloud
Fred Joseph; Sean Tucker; Rob
Buxton
Artificial Intelligence
Sean Tucker; Rob Buxton;
Michael Howe
Digital Media & Marketing
Tech
Linda Gridley; Steve Willis
FinTech
Dennis Rourke; Ben Howe; Sean
Tucker; Jon Weibrecht
LegalTech
Ben Howe; Steve Willis
Built Ecosystem
Charlie Schopp; Jon
Weibrecht
HR Tech
Michael Howe; Jon Weibrecht;
John Tinkham
GovTech
Russ Workman; Jon Guido
Office of the CFO &
Compliance
Jon Guido; Doug Hurst
Energy & Industrial Tech
Ben Howe; John Tinkham
3D Immersion (AR/VR/3D)
Elena Marcus; Sean Tucker
Supply Chain
Dennis Rourke
Cybersecurity
Maria Lewis Kussmaul; Eric
Davis; Russ Workman
GRC
Michael Howe; Joe Tabberer;
Jon Guido; Doug Hurst
Tech Enabled Services
Ben Howe; Jon Guido;
Michael Howe
Revenue Operations
Ben Howe; Sean Tucker;
Jon Guido; Doug Hurst
Workforce Management
Jon Guido; Doug Hurst
Verticalized Workflow
Automation
Jon Guido; Doug Hurst
AGC publishes monthly updates on each of the 21 sectors covered by the firm’s partners, staying in tune with trends across the tech landscape
AGC Partners
9
Led by 21 AGC Partners With Deep Sector Specialization
Confidential Materials. Do Not Distribute.
Linda Gridley
New York
Eric Davis
Boston
Rob Buxton
San Francisco
Jon Weibrecht
Boston
Vertical SaaS
Fred Joseph
Boston
Europe
Theo Mettenheimer
London
Cybersecurity
Maria Lewis Kussmaul
Boston
Cybersecurity
Elena Marcus
Los Angeles
Ben Howe
Boston
Charlie Schopp
Boston
Russ Workman
Boston
Dennis Rourke
Boston
FinTech
Steven Willis
Denver
HCIT / Life Sciences
Michael Howe
New York
Travel & Hospitality / Built World
Cloud / Infrastructure
Marketplaces
EdTech
Supply Chain
Cloud / Infra
Digital Media
AR / VR
Digital Media
eCommerce
MarTech
Mobility
CEO
Vertical SaaS
FinTech
Digital Media
Vertical SaaS
HCIT
Defense Tech
Nate Hennings
San Francisco
Digital Media
Gaming
MarTech
Sean Tucker
London
Vertical SaaS
Europe
Cloud / Infra
John Tinkham
Chicago
HCIT / Life Sciences
Hugh Hoffman
Minneapolis
Vertical SaaS
Cybersecurity
Doug Hurst
New York
Jon Guido
Boston
C-Suite
GRC
Joe Tabberer
London
Cloud / Infra
MarTech
GRC
AGC Partners
10
AGC Celebrated Its 20th Birthday in 2023
Confidential Materials. Do Not Distribute.
523
Transactions
186
SaaS Transactions
21
Partners
10
Locations
#1
SaaS Advisor
2003
Founded
AGC Partners
11
CEO & Buyer Testimonials
Confidential Materials. Do Not Distribute.
"The AGC team’s deep understanding of the market and strong
relationships with both investors and buyers facilitated exceptional
market engagement and a fantastic outcome for our Company.”
Peter Lilley, Co-Founder & CEO |
“Deals of this scale and complexity necessitate both strong tactical
execution and sage counsel on nuanced issues – AGC provided both!”
Ben Levin, CEO |
A.J. Rohde, Senior Partner |
“In a tough, competitive market, their execution is A+ and their
integrity is even higher.”
"The AGC team understood our unique value proposition and drove
interest from dozens of potential buyers. We are thankful for their
around-the-clock persistence and creative, hands-on approach to
maximizing value.”
“The AGC team was simply extraordinary. They dig in, roll up their
sleeves, and work hard.”
Jim Quagliaroli, Co-Founder, Managing Partner |
“The AGC team did a terrific job in a challenging market. They put their
client first, serving as clear, transparent and trusted strategic advisor
throughout the process."
Kevin Frick, Partner |
"Their team was smart, creative, responsive and dedicated
throughout both the equity and debt fund raising processes."
Jill Stelfox, CEO and Refounder |
Will Hunsinger, CEO |
"Partnering with AGC was absolutely the right decision for us. Their
approach is aggressive, transparent with no wasted cycles. We
couldn't be more thrilled with the result."
"It was essential that our banker could fundamentally understand the
Promon technology and offering. AGC quickly gained such under-
standing…which ultimately will lead to a timely and satisfactory
transaction.
"The AGC team were exceptional partners. We are very grateful for
their invaluable advice, quick action and 'always-on' approach. They
take a very complicated process and manage it with incredible
precision."
Barry Kelly, CEO |
Gustaf Sahlman, CEO |
Greg Coleman, CEO |
Tech Capital Markets
Appendix
‘24 Will Be a Year of Capitulation, Back to the Fundamentals,
and Increased Deal Making – Lots of Wood to Chop
AGC Partners
13
Tech PE Industry Becomes The Power Player In The Global Software Industry
Source: Pitchbook. As of 5/10/24.
(1) All figures based on estimates of tech assets as a percentage of total assets per Pitchbook.
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Tech PE Industry Growth (2015-2024)
▪ Dry powder is increasing because deal activity
is down, and new funds are still being raised.
The number of companies looking to transact
keeps getting bigger as holding periods mature
and life goes on without liquidity. Anecdotally,
pitch volumes have picked up dramatically,
which we hope will convert to many more
closed deals in the last quarter of 2024
▪
In ’23, of the 3,000 disclosed software deals,
1,500 were completed by our PE friends
▪ Tech PEs took 90+ public software companies
private in the past three years worth over
$300B, and now there are only 138 public
software companies left – turn on the IPO
engine ☺
▪ 80% of all PE acquisitions, or roughly 1,200
deals, are driven through their portfolio
companies
▪ With over $300B of dry powder, 5,300 portcos,
and $1.6T in Tech AUM, the PE influence will
only grow
$308B
Tech PE
Dry Powder
Tech PE
Portcos
$1.6T Tech AUM
5,300
Metric(1)
2015
2021
Today
Tech PE Dry Powder
$136B
$282B
$308B
Tech PE AUM
$550B
$1.3T
$1.6T
Tech PE Portcos
2,800
3,700
5,300
$136B
$550B
2,800
Indicates directional
change from 2021
AGC Partners
14
PE Funds Power On in 2024, Dominating the Strategics
Source: Pitchbook, 451 Research. Deal counts for the period 1/1/24 to 3/15/24.
▪ 150+ deals by Tech PEs through 2024
▪ Without the intense firepower of the PE
acquirers, the SaaS M&A market would be
hurting
▪ The top 15 strategics have combined for
only 33 deals versus 93 for the top 15 PEs in
’24
▪ PEs are doing more add-on acquisitions via
their portcos – 4 for every platform deal
o The quality of companies going to
market is lower in ’24 and PEs (or any
buyer for that matter) can fill in for
those deficiencies more easily with add-
on acquisitions
o
In
these
down markets,
portco
acquisitions are safer bets
▪ Of AGC’s 29 closed or LOI deals in ’23, 23
buyers were PE or PE-backed
▪ The SaaS conglomerates collectively did 13
deals in Q1, with Constellation adding 6 and
Roper adding 3
Strategic SaaS Conglomerates
# of Acquisitions in 2024
6
3
1
3
Rank
Investor
# of Acquisitions
Rep. Acquisition
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
11
10
7
7
7
7
6
6
5
5
5
5
4
4
4
Platform
Add-On
Rank
Company
# of Acquisitions
Rep. Acquisition
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
4
4
3
3
3
2
2
2
2
2
2
1
1
1
1
Most Active PE Acquirers (2024)
Most Active Strategic Acquirers (2024)
Note: Representative acquisition dates as of deal announcement.
AGC Partners
15
Top 138 PE Portco Acquirers are Acquiring at a 4:1 Pace Over the Top 138 Public SaaS Firms
Source: Pitchbook. Deal activity as of 5/10/24. Valsoft, Visma, and Evergreen were excluded from PE-Backed acquirers as we consider these firms SaaS consolidators
#
Company
Deal Count
Notable Deal
1
13
ND
2
10
ND
3
9
ND
4
8
ND
5
8
ND
6
8
ND
7
7
$83M
8
6
$88M
9
5
$75M
10
5
ND
128
Other
359
138
Total
421
▪ Many of the PEs are built to add value in
their portfolios through acquisitions, which
includes not only capital, but experienced
manpower as well, with an unapologetic
mandate to do as many quality acquisitions
as possible
▪ The public strategics since even before
COVID, have reduced their velocity of
acquisitions, taking it down further post-
COVID
▪ Post-COVID, there has also been a big push
by strategics to integrate their COVID
acquisitions and improve profitability
▪
In recent conversations with Microsoft and
other big tech strategics, the large cap tech
companies have been single mindedly
focusing
on
building
out
and
commercializing
their
internal GenAI
capabilities over acquisitions. It may be a
world where big tech is providing the AI
platform
for LLM and
infrastructure
capabilities and many of the new GenAI
startups will be sector specific, leveraging
technologies for those platforms, like the
cloud market today
▪ The combination of
the acquisitional
acceleration in the PE community and
deceleration in the strategic community has
created a 4:1 differential in the volume of
PE portco acquisitions versus public
strategics
97
84
83
81
76
14
17
25
21
27
2023Q1
2023Q2
2023Q3
2023Q4
2024Q1
138 PE-Backed Portfolio Company Deal Count Since Q1 2023
#
Company
Deal Count
Notable Deal
1
8
$185M
2
6
$464M
3
5
ND
4
4
$975M
5
4
ND
6
4
$1,860M
7
3
ND
8
3
ND
9
3
ND
10
3
$460M
128
Other
72
138
Total
104
AGC’s 138 Public SaaS Deal Count Since Q1 2023
PE-Backed Portco Deal Count
AGC’s 138 Public SaaS Deal Count
AGC Partners
16
What’s Slowing SaaS Growth?
Source: Pitchbook, S&P Global. As of 5/10/24.
▪ After closing the books across the
Global Technology landscape for Q1
2024, we can only hope that what
was an abysmal quarter for revenue
growth at 13% and transaction
activity down 19% means we have
hit rock bottom
▪ Software customers are heavily
negotiating renewals and pushing
off the upsells, and new logo
prospects are much tougher to find
and convert
▪ A likely slowdown in both the U.S.
and global economies in the second
half of
’24 will continue the
headwinds
▪ AGC tracks roughly 34K private
software companies across
the
world,
many
of
which
are
recalibrating their expectations and
projections downward for business
in ’24
▪ We have hit the bottom from a
growth perspective and better
performance will be the biggest
driver
to
increased transaction
volumes.
▪ That said, there are reasons to be
hopeful
even
in
these
early
challenging days of 2024
2024
2021
2022
2019
2023
2020
Revenue Growth (%)
31%
14%
25%
5%
30%
8%
20%
30%
35%
25%
(10%)
10%
0%
5%
15%
Q1 Q2 Q3 Q4 Q1
(9%)
Q2 Q3 Q4 Q1
Q3
Q2
Q1 Q2 Q3 Q4 Q1 Q2
Q4
Q4 Q1 Q2
AGC SaaS Index
S&P 500
NASDAQ 100
Q3
Pre-COVID
COVID
Today
AGC SaaS Index
25%
31%
14%
NASDAQ 100
8%
30%
8%
S&P 500
4%
25%
5%
AGC Partners
17
Not All SaaS Companies Are Equals
Source: Pitchbook. As of 4/19/24. Note: Top, middle, and bottom 15 based on ranking by EV / ’24E revenue multiple.
▪ Rule of 40 Rules – the best 15
companies at 48% on Ro40
trade at 17.5x, and worst at
9% trade at 1.0x
▪ 83%
are
projecting
profitability because it is now
required
by most
public
investors
▪ There
is a
large drop in
revenue growth for the middle
from 22% to 14% between last
year and this year
▪ Publics and privates are back
to the boring fundamentals,
building better, sustainable
businesses
2024 Data Unless Specified
Top 15
Middle 15
Bottom 15
All 150
Revenue Multiple (TTM)
17.5x
5.9x
1.0x
5.8x
EBITDA Multiple
47x
15x
10x
21x
Rule of 40
48%
37%
9%
33%
Revenue Growth (’23)
27%
22%
1%
17%
Revenue Growth (’24)
25%
14%
0%
13%
EBITDA Margin
23%
23%
8%
19%
Gross Margin
79%
73%
69%
77%
R&D Spend
(% of Revenue)
28%
20%
21%
23%
S&M Spend
(% of Revenue)
42%
31%
30%
35%
Revenue / Employee
$297K
$294K
$217K
$263K
AGC Partners
18
Evaluating Growth’s Golden Impact
Source: Pitchbook. As of 5/10/24. Note: Deciles ordered by EV / LTM Revenue.
SaaS Index
Sector
EV/ ’24
Rev.
EV/ ’24
EBITDA
’24 Rev
Growth
EBITDA
Margin
Market
Cap
# of
Comps
DevOps
8.8x
42x
23%
9%
$6,495
8
Built
Ecosystem
7.9x
25x
11%
22%
$9,315
12
Cloud /
Data
6.1x
39x
16%
12%
$8,945
13
Cyber
Security
6.1x
29x
11%
22%
$6,115
18
C-Suite
5.7x
25x
16%
25%
$4,540
15
FinTech
5.4x
29x
18%
16%
$2,585
7
Europe
4.5x
20x
12%
31%
$1,005
9
MarTech
3.5x
21x
13%
19%
$1,885
18
HCIT
3.6x
13x
9%
22%
$1,275
8
Median:
5.3x
22x
13%
20%
$3,950
%
Breakdown by Sector/Geography
Decile
Median
EV / ’24
Rev
Median ’24
Revenue
Growth
Median ’24
EBITDA
Margin
Rule of 40
10
17.9x
23%
22%
45%
9
11.1x
17%
28%
45%
8
9.2x
17%
28%
45%
7
7.4x
15%
19%
33%
6
6.3x
15%
28%
43%
5
5.1x
17%
15%
32%
4
4.4x
11%
19%
30%
3
3.5x
10%
21%
31%
2
2.0x
6%
19%
25%
1
1.1x
0%
9%
9%
Total
Median
5.3x
13%
20%
33%
▪ There is a massive spread in valuations
now between the top SaaS decile, trading
at 17.9x revenues and the bottom decile,
trading at 1.1x, which also correlates with
Ro40 performance at 45% and 9%
respectively
▪
Interestingly, the top 9th and 10th deciles
are almost identical on Ro40, but the
differential in valuation is 17.9x vs. 11.1x,
and that lift is entirely driven by the 10th
decile’s superior growth rate, which is
23% versus 17%. Growth matters as much
as it ever has
▪ Looking at the bottom 3rd of SaaS
performers, you now have a wasteland of
45 companies with a median of 2x
revenues, which actually have a pretty
good Ro40 of 21% ☺
▪ We also see further disparity in valuations
by sector, as DevOps and Built Ecosystem
are now trading at 8.3x ’24 revenues while
MarTech and HCIT are trading at 3.6x
revenues. MarTech and HCIT companies
are predominantly small cap. Same is true
for European SaaS companies. Once again,
bigger is better in SaaS land
▪ A big part of that is not just sector, but
growth rates, as the lower performers are
growing at 11% and top performers are
growing at 16%
AGC Partners
19
Revenue Growth is a 2:1 Driver of Valuation Over Superior Profitability
Source: Pitchbook, as of 5/10/24. Note: Deciles ordered by EV / LTM Revenue.
0%
5%
10%
15%
20%
25%
2x
4x
6x
8x
18x
16x
14x
12x
10x
0x
10
9
8
7
6
5
4
3
2
1
Valuation vs. Revenue Growth
0%
5%
10%
15%
20%
25%
30%
2x
4x
6x
8x
18x
16x
14x
12x
10x
0x
10
9
8
7
6
5
4
3
2
1
Valuation vs. EBITDA Margin
R2=0.42
R2=0.83
EV / ’24 Rev
’24 EBITDA Margin
EV / ’24 Rev
’24 Revenue Growth
AGC Partners
20
Public SaaS Valuations Stabilize Over the Last 18 Months at 6x LTM Revenue
Source: Pitchbook. As of 4/19/24.
(2) Represents median EV / revenue multiples on AGC-
advised private deals. The latest reading of 9x is for 1H ’24.
(1) Represents trailing
30-day medians.
Oct ’22
Jan ’23 Apr ’23
Jul ’23 Oct ’23 Dec ‘23 Apr ’24
18.1x
Jan ’14
Jan ’15
Jan ’16
Jan ’17
Jan ’18
Jan ’19
Jan ’20
Jan ’21
Jan ’22
2x / 14x
4x
6x
8x / 21x
10x
12x
14x / 29x
16x
18x
20x / 36x
▪ Even with the recent run up
in
the public markets,
software
companies
are
valued
at
only
5.9x
revenues and have been
there for over a year now
▪ While the public market
peaked at the height of the
bubble at 18x revenue, our
private
SaaS
control
transactions stayed steady
at 7-10x and even today are
at roughly 9x
▪ An “A” SaaS story is still
generating 10-15x revenue
▪ EBITDA multiples
have
risen to 28x – public and
private
companies
are
primarily focused on profits
Public SaaS Multiples Are in a Longer Period of Stability Than We Have Ever Seen
5.9x
(EV / Rev.)
AGC’s Private
SaaS Deal
Multiples
AGC’s Public
SaaS Index
EV / TTM Revenue
EV / TTM EBITDA(1)
AGC-Advised Private
SaaS Deal Multiples(2)
9x
(EV / Rev.)
4.9x
8.1x
5.9x
2014-2016
2017-2019
Q4 ’22 –Today
Indicates median EV / revenue multiple by time period
AGC’s Public
SaaS Index
28x
(EV / EBITDA)
AGC’s Public
SaaS Index
Revenue / EBITDA multiple
18.1x / 32x – H1 ’21 Highs
10x – H1 ’22 High
7.0x
5.0x
AGC Partners
21
SaaS Companies’ Underperformance on Revenue Growth and Dearth of Public Strategic Buyers is Suffocating M&A Activity
Source: Pitchbook, 451 Research. As of 5/10/24. Note: M&A Value for 2024 excludes Synopsys’ acquisition of Ansys. Only 15% of deals since 2019 have a disclosed deal value
2024
2021
2022
2019
2023
2020
SaaS Company Revenue Growth (%)
27%
22%
31%
29%
14%
11%
14%
6%
20%
5%
10%
15%
20%
25%
30%
35%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2E
AGC SaaS Index
Revenue Growth
AGC SaaS Index
EBITDA Margin
Pre-COVID
COVID
Today
Revenue Growth
25%
31%
14%
EBITDA Margin
10%
14%
20%
▪ Growth slowed from 31% to 14%,
with 120 of the 138 public SaaS
companies
projecting
to
be
profitable, as the median EBITDA
margin has jumped from 6% to 20%
▪ CEOs and PEs are optimizing EBITDA
while trying to turn the tide on
revenue growth
▪ Premier revenue growth
is still
extremely hard to achieve, limiting
the supply of companies to bring to
market, putting a big wrench in the
M&A deal machine
▪ For the first time in Q4, EBITDA
margins, at 18%, exceeded revenue
growth, 15% - don’t expect these
lines to cross again until the IPO
engine starts revving again
▪ Deals are getting done but there are
fewer, they are smaller, and they are
not all perfect
▪ The COVID hangover from excess
technology consumption and inflated
valuations continues to subdue M&A
and IPO activity
3,800
4,300
5,000
5,300
4,300
’17-’19
2021
2022
2023
2024 (Ann.)
-19%
M&A Volume
$460B
$790B
$590B
$290B
$300B
’17-’19
2021
2022
2023
2024 (Ann.)
-35%
+3%
M&A Value
Year
’17 – ‘19
‘21
‘22
‘23
‘24 (Ann.)
Target FTEs
-
-
41
46
35
Avg. Deal Value ($M)
$55M
$108M
$45M
$38M
$40M
Disclosed Deals
607
1021
845
746
484
AGC Partners
22
How are Investors and Buyers Grading Enterprise SaaS Performance?
Confidential Materials. Do Not Distribute.
Key SaaS Metrics
What Are Core SaaS Performance Metrics?
Discount
Benchmark
Premium
ARR Scale
<$10M
$10-30M
$30M+
ARR Growth
<15%
15-40%
40%+
Gross Margin
<70%
70-90%
90%+
EBITDA Margin
<0%
0-20%
20%+
Gross $ Retention
<89%
89-95%
95%+
Net $ Retention
<100%
100-110%
110%+
Rule of 40%
<20%
20-40%
40%+
LTV:CAC
<3x
3x-5x
5x+
TAM
<$500M
$500M - $2B
>$2B
New to Upsell ARR
25:75
50:50
75:25
Top Customer Concentration
>25%
25-10%
<10%
Barriers to Entry
Low
Medium
High
Mission Critical
Low
Medium
High
% Recurring Revenue
<70%
70% - 90%
>90%
ASP
<$50K
$50K-$150K
$150K+
▪ Is it big enough for our fund size
or to move the needle for a
strategic?
▪ 15%
growth minimum
for
platform deals
▪ Lose a lot of the buyers with
gross retention less than high
80s%
▪ Rule of 40 is more like rule of 20
these days
▪ TAM needs to be more than
$500M so investors and buyers
have an exit pathway
▪ And not to be forgotten is the
new due diligence checklist item
of the impact AI has on virtually
every company’s future roadmap
AGC Partners
23
Strategics, Quiet in 2023, Are Powering Back in 2024
Confidential Materials. Do Not Distribute.
Source: 451 Research. Note: Data as of 3/15/24.
▪ The top 10 strategics were
down 42% in acquisitions in
‘23
▪ Strategics focused on their
performance and were not
so interested in chasing tech
companies
clinging
onto
COVID
days’
lofty
valuations
▪ Strategics
have
now
stabilized on both growth
and margins coming off their
COVID highs with lots of
cash, market cap, and a need
for hot new tech, as well as
new products
that will
expand their TAMs and
accelerate growth
▪ Strategics have already been
a bigger force in M&A in ‘24
Deal Volume of Top 10 Strategic Tech Acquirers (2018, 2020, 2023, and 2024)
97
74
56
101
2018
2020
2023
2024 (Ann.)
-42%
AGC Partners
24
Key Takeaways for Those Doing Tech M&A in 2024
If you have a solid SaaS story with great metrics, the PE buyers are ready, willing, and able with $300B+ in their war chest
Most PEs continue to hold, not sell, their portcos for the time being. With many companies in the portfolio missing projections, PEs are holding on tight to their
strongest performers to show value creation and offset the losses. For the rest of the portfolio, they are also holding on until the companies perform better while
hoping that valuations improve. A few PEs are bringing companies to market, but not many. Those companies are performing well and are solid, but not their best
Strategics focused on organic performance in ’23 but are now more engaged on larger deals as valuations become more attractive
Debt markets had pulled way back, leverage ratios dropped from 6x to 3x, and the blended cost doubled from 6-7% to 11-13%, but now with big deals hard to find,
lenders are starting to offer higher leverage rations and lower rates
Slower technology spending continues in ’24 – the enterprise and consumer pullback in tech spend has directly impacted the revenue growth of our technology clients,
which has slowed all deal activity of $50m EV and larger. We expect a steady pickup as lower valuations become the new reality; sellers capitulate on realistic
projections and valuations; PEs make hard choices on which companies to put up for sale; and strategics jump back into the game
PEs were the go-to buyer for 2023 with strategics dialing back and IPOs highly limited – 23 out of AGC’s 29 deals in ’23 were PE-backed
Flight to quality – more PE dry powder than ever before (increased demand) with very few gold standard companies coming to market (limited supply) is driving
valuations to ’21 levels on “B+” or better companies in control transactions. As volume of companies on the market picks up, these supercharged valuations may come
down as both PEs and strategics will have many more quality companies to choose from
Bid-ask spreads – which remained wide in ‘23 – are tightening up in ’24 as the hyper growth rates and 50x valuations fall further and further into the past
Median SaaS valuations settle at 6x – SaaS valuations have been trading at roughly 6x revenue for over a year in a very tight band – that’s unusual. The last time they
traded briefly at this level was in 2017. Profitability is now required and rule of 40 is the gold standard. The market is far more rigorous and punishing, focused on
retention, mission-critical products, and efficient growth, with the outperformers trading at 13x revenues and the underperformers trading at 2x
Some CEOs with board control are jumping in: These CEOs with strong ’23 and early ’24 financial performance are driving most of our early ’24 new engagements
AGC Partners
25
Disclosure
Note: This document is for information and discussion purposes only, and it is intended for institutional and sophisticated investors. This document is based upon
sources believed to be reliable; however, we do not guarantee the sources’ accuracy. Unless otherwise indicated, AGC does not believe that the information
contained herein is sufficient to serve as the basis of an investment decision. There can be no assurance that the statements, estimates or forecasts (if any) will be
achieved and actual results may be materially different. The testimonials contained herein may not be representative of the experience of other customers or
clients. Testimonials are no guarantee of future performance or success. This is not a solicitation of an offer of any kind. To learn more about the
company/companies that is/are the subject of this document, contact one of persons named herein.
Confidential Materials. Do Not Distribute.
Global Reach
Company Overview
May 2024
AGC Partners
1
AGC Powered Through The Headwinds– Hiring Up for Accelerating Market Momentum
(1) 451 Research deal count based on all SaaS related Sell-Side
transactions since 2010. Excludes co-managed deals.
3
17
37
56
66
83
103
131
155
186
207
235
263
295
327
356
391
413
453
495
523
’09
’03
’10
’04 ’05 ’06 ’07 ’08
’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22
$250M-$1B
<$100M
$100-$250M
36%
33%
31%
’23-’24
AGC Cumulative Deal
Count Since 2003
AGC Deals by Enterprise
Value Breakout
Powering through the headwinds
▪ 7 deals currently under LOI
▪ 65+ closed deals since 2022
▪ 45 active engagements
▪ 27 new engagements since
November
523 closed deals makes AGC
the top SaaS advisor and #1 in
closed tech sell side deals
Building in downturn
▪ 21 Partners and hiring
▪ 20+ new hires
in
’24
signed up for battle!
Celebrated our 20th year in
business in ‘23
AGC Mission: To Expand Our Lead in the Middle Market – More Flow and Knowledge Begets Better Client Outcomes
(2) 451 Research deal count based on all disclosed technology related
Sell-Side transactions from 2014-2024 YTD. Excludes co-managed deals.
Firm
# Trans.
1.
451 Research SaaS
Rankings(1)
186
1.
165
2.
127
3.
101
4.
99
5.
Firm
# Trans.
1. Raymond James
76
2. Raymond James
224
3. Houlihan Lokey
221
4. William Blair
216
5. Canaccord Genuity
215
257
. AGC Partners
Top Sell-Side Tech Deal
Makers Since 2014(2)
Median ARR multiple of 9x
on all deals since 2022
AGC Partners
2
AGC Kicks Off 2024 Strong With 6 Announced Deals
End-to-end supply
chain technology
has received a significant
investment from
has agreed to be
acquired by
Cloud-based travel
management systems
a portfolio company of
Michael Van Duijn
CEO
“The very professional AGC team, with
Dennis in front, navigated us smoothly
through
the
intense
investor
exploration process. The extensive
experience of AGC in the world of
private equity in combination with
their
rich
network
and
deep
understanding of our business and
markets, created the path for achieving
our desired outcome.”
Aaron Shepherd
Co-Founder & CEO
“The industry acumen that Jon and
Charlie brought to the table, their
strategic
foresight,
and
their
comprehensive understanding of legal,
financial, and tax issues served as the
cornerstone of a lucrative agreement
for myself, my
family, and my
stakeholders. We express our gratitude
for their dedication and needless to
say, we are thrilled with the outcome!"
has agreed to be
acquired by
Customer experience
management software
Cybersecurity risk,
tech, & networking
has received a strategic
investment from
Kair Kasper
Co-Founder & CRO
"What a ride. There were literally
countless of times when I thought back
to a few months ago when we were
discussing if it's even necessary to
work with an advisor and thinking how
grateful I am to have you on board.
Fred and the team got us to a signed
deal on what I'd say are excellent
terms. Thank you for that, I don't think
we would have landed here otherwise."
Larry Pfeifer
Founder
“We chose AGC due to their depth of
knowledge in our space as well as the
solid reputation for delivering results!
Their attention to every aspect of the
transaction and being able to view and
explain the process from a 360 degree
perspective was important to us as well
as operating with integrity. We could
have not picked a better partner to go
through this process with us.”
has been acquired by
Network Management
Software
Ted Helvey
CEO & Chairman
“I still remember when Jonathan
and Charlie took me to lunch
trying to convince me how
attractive they felt Nomadix and
GlobalReach would be to many
potential investors. When we
took the leap of faith to have
them
lead
us
through
a
confidential process, we did not
know where the journey would
lead.
In addition
to being
pleased with the results by
selling the companies at a high
valuation
to
a
prestigious
strategic buyer, we also learned
how important choosing the
right partner is for the journey.
Jonathan, Charlie, and their
amazing
team worked and
advocated
tirelessly on our
behalf at every stage of the
process. We cannot speak highly
enough
about what
AGC
Partners did to lead us through
to a successful transaction”
a portfolio company of
has been acquired by
Network Management
SaaS
a portfolio company of
AGC Partners
3
AGC Is All About The Results
Note: Apryse (fka PDFTron) acquired iText. All other clients were sell-side engagements.
Confidential Materials. Do Not Distribute.
Majority growth
investment from Thoma,
and the acquisition of
iText in 2022
Outcome
Engagement Summary
Growing 100%+,
PDFTron hired AGC to
run a quick and efficient
financing process. AGC
reached out to 7 of the
best investors and
secured 4 bids above
expectations. After
close, AGC maintained
the relationship and
advised PDFTron on a
buy-side engagement in
2022
Received a minority
growth investment from
Kayne Anderson and
CIBC
Outcome
Engagement Summary
Ran a dual-track
process for a leading
player in the multi-
cloud data
management category
which led to a valuation
at a 10% premium to
IOI bids; enabling them
to supercharge growth
ahead of a future
liquidity event for
management
Received a minority
growth investment at a
premium multiple from
Sapphire Ventures
Outcome
Engagement Summary
ActivTrak engaged AGC
to run an accelerated
growth equity process,
which resulted in 10+
submitted offers within
3 weeks of launch. With
the pressure of intense
competition, AGC
ultimately negotiated
exceptional terms for
ActivTrak
Received a minority
growth investment from
Riverwood Capital
Outcome
Engagement Summary
AGC launched a sell-
side process to a
diverse set of financial
sponsors, while also
launching to top
strategics to conduct a
market test. This
resulted in 15 IOIs, but
ultimately AGC stuck
with initial goal of a
capital raise and
negotiated optimal
terms in a turbulent
market
Acquired by NetApp at a
premium multiple amidst
the public markets being
in deep turmoil
Outcome
Engagement Summary
Brought on to raise
growth capital, AGC
launched to 30
growth investors
while managing select
strategic interest.
AGC drove 5 parties
to IOIs and LOIs and
leveraged the
competitive dynamics
to secure a premium
offer from a public
strategic
Raised their Series B at
at a premium multiple,
led by Craft Ventures
Outcome
Engagement Summary
AGC was engaged by
People Data Labs, a
pioneer in people data
growing ~90%, to
conduct a dual track
process that brought in
6 competitive bids and
a premium valuation
from elite growth and
venture investors
Received a growth
investment from TCV at
a high valuation
Outcome
Engagement Summary
Ran an expeditious dual
track process on the
back of inbound private
equity interest. After
advancing a group of
10 elite middle market
tech investors, the
Company chose TCV
for a majority
investment generating
substantial shareholder
value and allowing
leadership a second
bite at the apple
AGC Partners
4
AGC Has Strong Relationships With Most Tech PEs and Drives Premium Outcomes
Confidential Materials. Do Not Distribute.
15
Deals
Completed
5
Deals
Completed
6
Deals
Completed
6
Deals
Completed
10
Deals
Completed
7
Deals
Completed
Client
Investor
Client
Investor
(Litera)
(Planview)
(Apotheco)
(Access)
(IFS)
200+ Close Relationships with Leading
Growth Investors
Best Relationships: AGC has developed tight-knit
relationships with the key decision makers with virtually
all the growth investors through its 523 closed deals. As
demonstrated by all five of its conferences, AGC is close
to and brings together the top global PEs
Incredible Valuations: AGC generates exceptional
outcomes for its clients – 65+ closed deals since 2022
with a 9x median revenue multiple
Deep and Highly Tuned Execution: Over 20 years and
523 deals, AGC has built a repository of 100 proprietary
documents for A+ execution
Multi-Transaction, Long-Term Relationships: After
helping clients raise growth capital or complete a recap,
AGC maintains the relationship for an extended period to
help with buy-side M&A efforts as well as an eventual
resale of the business
AGC Partners
5
AGC’s Extensive Experience Selling To Top Public Strategic Acquirers
Confidential Materials. Do Not Distribute.
Select Public Strategic Partners – 100+ Deals in Total
Tech Titans
Cyber
Security
Infrastructure
Vertical
Software
Healthcare
Deep Market Intelligence: AGC gains unparalleled
sector knowledge from Partner-led published research
insights reports, AGC’s sector-specific conferences, and
extensive deal history—translating to a fundamental
understanding of strategics
AGC’s Crafted Approach to Strategic Buyers: AGC’s
approach to marketing and managing Strategics is
differentiated through high-touch, tailored interactions
with each party – a process that has been fine tuned over
20 years of experience and 100s of transactions with
strategic buyers
Experts in Creating a Must-Have Buyer Sentiment:
Generating buy-in from technologists is key to delivering
an exceptional outcome; AGC’s Partners are experts in
navigating complex organizations to create direct
engagement with the key decision makers
Creating Customized Divisional Analysis: Strategic
buyers, particularly in today’s world of dealmaking, need
to bring their CEO and board acquisitions that will bring
strategic incremental revenues, expanded TAM, and also,
accretion to earnings in the near-to-mid term
Senior Industry Relationships: As the most active
Technology-focused bank, AGC maintains constant
contact with a diligently-tracked list of top strategics,
providing deep insight into their acquisition roadmaps,
strategy, and potential synergies to maximize value
200+ Close Relationships with Top
Strategic Acquirers
AGC Partners
6
The Best Middle-Market Growth Technology Conferences Globally
▪ AGC Partners is one of the only investment banks to hold middle-market
industry conferences solely focused on driving relationships among strategic
acquirers, PEs, and emerging private growth companies spanning all major
tech sectors. At our Boston conference in September, we had nearly 2,000
one-on-ones
▪ Offers insights from leaders in their respective industries and direct
engagement with the most active investors in the space
▪
Includes 500+ early and growth stage technology companies (revenues $5-
$100M+ ARR) and 600+ private equity firms and strategic acquirers
▪ High caliber panels and 30-minute pre-arranged one-on-one meetings lead to
hundreds of new leads, several new engagements, and drive the marketing
efforts for pre-engaged clients
Premier Global Technology Conferences
Testimonials
“The single best use of time for making new, relevant contacts”
“This AGC event was perhaps the best such investor event I have attended in
a decade. The breadth of investor types, diverse perspectives, and opportunity
to meet other entrepreneurs was both impressive and beneficial”
Fantastic event! We always find a deal from the AGC Events!
Boston
September
2024
San Francisco
May 2024
Toronto
June 2024
Conference Final KPIs
Austin 2023
360
Total
Attendees
140
Fast-Growing
Private Tech
Companies
1,600
1-On-1
Meetings
160
Leading Tech PE and
Growth Investors
and Strategics
Boston 2023
Austin
December
2024
London
March 2024
Toronto 2024
250+
Total
Attendees
100+
Fast-Growing
Private Tech
Companies
1,000+
1-On-1
Meetings
100+
Leading Tech PE and
Growth Investors and
Strategics
Confidential Materials. Do Not Distribute.
525
Total
Attendees
175
Fast-Growing
Private Tech
Companies
1,935
1-On-1
Meetings
220
Leading Tech PE and
Growth Investors
and Strategics
September 19th, 2024
Indicates projected KPIs
December 3rd, 2024
June 20th, 2024
Indicates 2024 Conference Dates
Nashville 2024
125+
Total
Attendees
50+
Fast-Growing
Private Tech
Companies
600+
1-On-1
Meetings
75+
Leading Tech PE and
Growth Investors
and Strategics
San Francisco 2024
London 2024
300
Total
Attendees
140
Fast-Growing
Private Tech
Companies
1,400
1-On-1
Meetings
150
Leading Tech PE and
Growth Investors
and Strategics
500
Total
Attendees
175
Fast-Growing
Private Tech
Companies
1,500
1-On-1
Meetings
250
Leading Tech PE and
Growth Investors and
Strategics
May 6th, 2024
May 16th, 2024
March 22nd, 2024
Nashville
May 2024
AGC Partners
7
Deep Domain Knowledge: 270 Market Leading Private Tech Sector Reports
Confidential Materials. Do Not Distribute.
In an era marked by the convergence
of
digital
transformation, GRC
software has emerged as a catalytic
force in a fragmented and outdate
marketplace.
Innovative
GRC
solutions will play a major role in
transforming businesses in the future
Partner Led From Start to Finish
Vertical Software
Automotive
Building / Engineering
CRM / CXM
C-Suite
Education
Food/Restaurant
GovTech
Healthcare
HR Tech
Insurance
Legal
Public Sector
Real Estate
Travel & Leisure
Cybersecurity
APT
CASB
Cybersecurity
Endpoint
IAM
IOT / SCADA
Network
Security Orchestration
Security Services
Threat Intelligence
User Behavior Analytics
Vulnerability
Internet
AdTech
Augmented Reality
Consumer
E-Commerce
Food Tech
Gaming
Internet
Marketplaces
MarTech
Mobile
Social
Retail
Virtual Reality
Infrastructure
AI
BI / Analytics
Big Data
Cloud Computing
Communication
Data Center
DevOps
Energy & Industrial
ERP / Supply Chain
Internet of Things
IT Services
Mobility Solutions
Smart Cities
Storage
Selected Recent Partner-Authored Whitepapers
HCIT
Clinical Decision Support
Clinical Trials
Dental Solutions
EHR
Genomics Data Mgmt.
HIS
Payer Solutions
Pharma Analytics
PMS
Precision Medicine
RCM / Payment Solutions
Telehealth
▪ 270 industry thought pieces published by
AGC Partners covering Vertical Software,
Cybersecurity,
Infrastructure,
Internet,
HCIT, FinTech, and 60+ subsectors
▪ Partner-led and authored, with 6-person
AGC research team working on perfecting
each piece, going deep on the market, TAM,
key trends, challenges, M&A and financings
activity
▪ Developed and implemented 20 years of
proprietary processes and procedures that
will typically unearth 200-300 leading
private companies in each sector
FinTech & Payments
Blockchain
Digital Lending
FinTech Market Updates
Mobile App Monetization
Mobile Money
Payments
Remittance / Money
Transfer
GRC Software
Today, operators continue to face
significant macro challenges, even as
the
restaurant
ecosystem
has
normalized coming
through
the
pandemic. Tech adoption priorities
have shifted, as restaurants search
for efficiency.
Restaurant Technology
Adoption of digital first, patient
facing
technology
accelerated
dramatically out of necessity during
COVID and isn’t going anywhere, as
patient preferences have shifted,
leading to emerging technologies
that now empower patients.
Patient Facing Technology
Industry Leading Research Covering the Most Coveted Private Sectors of Technology
With 5,000 active Tech PE portfolio
companies and another 80K VC-
backed companies, 2024 will be a
year of capitulation characterized by
a
return
to
fundamentals and
increased deal making.
Tech PE Year-End Report
Technologies
like
AI,
Edge
Computing, and IoT took the main
stage in 2023, as the transition to
the cloud and SaaS by supply chain
firms continues to be a major growth
driver of the ever-growing market.
European Supply Chain
In a landscape characterized by
resilience, the DACH Tech M&A
arena has witnessed an impressive
surge, breaking records in 2022 and
2023.
Despite
digitalization
challenges,
industry
giants
are
embracing digital startups.
DACH Technology Report
AGC Partners
8
Strong Experience Across Various Sectors
HCIT & Life Sciences
Hugh Hoffman; Michael
Howe; John Tinkham
DevOps
Sean Tucker; Rob Buxton;
Fred Joseph; Michael Howe
EdTech
Steve Willis; Sean Tucker; Ben
Howe
Infrastructure & Cloud
Fred Joseph; Sean Tucker; Rob
Buxton
Artificial Intelligence
Sean Tucker; Rob Buxton;
Michael Howe
Digital Media & Marketing
Tech
Linda Gridley; Steve Willis
FinTech
Dennis Rourke; Ben Howe; Sean
Tucker; Jon Weibrecht
LegalTech
Ben Howe; Steve Willis
Built Ecosystem
Charlie Schopp; Jon
Weibrecht
HR Tech
Michael Howe; Jon Weibrecht;
John Tinkham
GovTech
Russ Workman; Jon Guido
Office of the CFO &
Compliance
Jon Guido; Doug Hurst
Energy & Industrial Tech
Ben Howe; John Tinkham
3D Immersion (AR/VR/3D)
Elena Marcus; Sean Tucker
Supply Chain
Dennis Rourke
Cybersecurity
Maria Lewis Kussmaul; Eric
Davis; Russ Workman
GRC
Michael Howe; Joe Tabberer;
Jon Guido; Doug Hurst
Tech Enabled Services
Ben Howe; Jon Guido;
Michael Howe
Revenue Operations
Ben Howe; Sean Tucker;
Jon Guido; Doug Hurst
Workforce Management
Jon Guido; Doug Hurst
Verticalized Workflow
Automation
Jon Guido; Doug Hurst
AGC publishes monthly updates on each of the 21 sectors covered by the firm’s partners, staying in tune with trends across the tech landscape
AGC Partners
9
Led by 21 AGC Partners With Deep Sector Specialization
Confidential Materials. Do Not Distribute.
Linda Gridley
New York
Eric Davis
Boston
Rob Buxton
San Francisco
Jon Weibrecht
Boston
Vertical SaaS
Fred Joseph
Boston
Europe
Theo Mettenheimer
London
Cybersecurity
Maria Lewis Kussmaul
Boston
Cybersecurity
Elena Marcus
Los Angeles
Ben Howe
Boston
Charlie Schopp
Boston
Russ Workman
Boston
Dennis Rourke
Boston
FinTech
Steven Willis
Denver
HCIT / Life Sciences
Michael Howe
New York
Travel & Hospitality / Built World
Cloud / Infrastructure
Marketplaces
EdTech
Supply Chain
Cloud / Infra
Digital Media
AR / VR
Digital Media
eCommerce
MarTech
Mobility
CEO
Vertical SaaS
FinTech
Digital Media
Vertical SaaS
HCIT
Defense Tech
Nate Hennings
San Francisco
Digital Media
Gaming
MarTech
Sean Tucker
London
Vertical SaaS
Europe
Cloud / Infra
John Tinkham
Chicago
HCIT / Life Sciences
Hugh Hoffman
Minneapolis
Vertical SaaS
Cybersecurity
Doug Hurst
New York
Jon Guido
Boston
C-Suite
GRC
Joe Tabberer
London
Cloud / Infra
MarTech
GRC
AGC Partners
10
AGC Celebrated Its 20th Birthday in 2023
Confidential Materials. Do Not Distribute.
523
Transactions
186
SaaS Transactions
21
Partners
10
Locations
#1
SaaS Advisor
2003
Founded
AGC Partners
11
CEO & Buyer Testimonials
Confidential Materials. Do Not Distribute.
"The AGC team’s deep understanding of the market and strong
relationships with both investors and buyers facilitated exceptional
market engagement and a fantastic outcome for our Company.”
Peter Lilley, Co-Founder & CEO |
“Deals of this scale and complexity necessitate both strong tactical
execution and sage counsel on nuanced issues – AGC provided both!”
Ben Levin, CEO |
A.J. Rohde, Senior Partner |
“In a tough, competitive market, their execution is A+ and their
integrity is even higher.”
"The AGC team understood our unique value proposition and drove
interest from dozens of potential buyers. We are thankful for their
around-the-clock persistence and creative, hands-on approach to
maximizing value.”
“The AGC team was simply extraordinary. They dig in, roll up their
sleeves, and work hard.”
Jim Quagliaroli, Co-Founder, Managing Partner |
“The AGC team did a terrific job in a challenging market. They put their
client first, serving as clear, transparent and trusted strategic advisor
throughout the process."
Kevin Frick, Partner |
"Their team was smart, creative, responsive and dedicated
throughout both the equity and debt fund raising processes."
Jill Stelfox, CEO and Refounder |
Will Hunsinger, CEO |
"Partnering with AGC was absolutely the right decision for us. Their
approach is aggressive, transparent with no wasted cycles. We
couldn't be more thrilled with the result."
"It was essential that our banker could fundamentally understand the
Promon technology and offering. AGC quickly gained such under-
standing…which ultimately will lead to a timely and satisfactory
transaction.
"The AGC team were exceptional partners. We are very grateful for
their invaluable advice, quick action and 'always-on' approach. They
take a very complicated process and manage it with incredible
precision."
Barry Kelly, CEO |
Gustaf Sahlman, CEO |
Greg Coleman, CEO |
Tech Capital Markets
Appendix
‘24 Will Be a Year of Capitulation, Back to the Fundamentals,
and Increased Deal Making – Lots of Wood to Chop
AGC Partners
13
Tech PE Industry Becomes The Power Player In The Global Software Industry
Source: Pitchbook. As of 5/10/24.
(1) All figures based on estimates of tech assets as a percentage of total assets per Pitchbook.
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Tech PE Industry Growth (2015-2024)
▪ Dry powder is increasing because deal activity
is down, and new funds are still being raised.
The number of companies looking to transact
keeps getting bigger as holding periods mature
and life goes on without liquidity. Anecdotally,
pitch volumes have picked up dramatically,
which we hope will convert to many more
closed deals in the last quarter of 2024
▪
In ’23, of the 3,000 disclosed software deals,
1,500 were completed by our PE friends
▪ Tech PEs took 90+ public software companies
private in the past three years worth over
$300B, and now there are only 138 public
software companies left – turn on the IPO
engine ☺
▪ 80% of all PE acquisitions, or roughly 1,200
deals, are driven through their portfolio
companies
▪ With over $300B of dry powder, 5,300 portcos,
and $1.6T in Tech AUM, the PE influence will
only grow
$308B
Tech PE
Dry Powder
Tech PE
Portcos
$1.6T Tech AUM
5,300
Metric(1)
2015
2021
Today
Tech PE Dry Powder
$136B
$282B
$308B
Tech PE AUM
$550B
$1.3T
$1.6T
Tech PE Portcos
2,800
3,700
5,300
$136B
$550B
2,800
Indicates directional
change from 2021
AGC Partners
14
PE Funds Power On in 2024, Dominating the Strategics
Source: Pitchbook, 451 Research. Deal counts for the period 1/1/24 to 3/15/24.
▪ 150+ deals by Tech PEs through 2024
▪ Without the intense firepower of the PE
acquirers, the SaaS M&A market would be
hurting
▪ The top 15 strategics have combined for
only 33 deals versus 93 for the top 15 PEs in
’24
▪ PEs are doing more add-on acquisitions via
their portcos – 4 for every platform deal
o The quality of companies going to
market is lower in ’24 and PEs (or any
buyer for that matter) can fill in for
those deficiencies more easily with add-
on acquisitions
o
In
these
down markets,
portco
acquisitions are safer bets
▪ Of AGC’s 29 closed or LOI deals in ’23, 23
buyers were PE or PE-backed
▪ The SaaS conglomerates collectively did 13
deals in Q1, with Constellation adding 6 and
Roper adding 3
Strategic SaaS Conglomerates
# of Acquisitions in 2024
6
3
1
3
Rank
Investor
# of Acquisitions
Rep. Acquisition
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
11
10
7
7
7
7
6
6
5
5
5
5
4
4
4
Platform
Add-On
Rank
Company
# of Acquisitions
Rep. Acquisition
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
4
4
3
3
3
2
2
2
2
2
2
1
1
1
1
Most Active PE Acquirers (2024)
Most Active Strategic Acquirers (2024)
Note: Representative acquisition dates as of deal announcement.
AGC Partners
15
Top 138 PE Portco Acquirers are Acquiring at a 4:1 Pace Over the Top 138 Public SaaS Firms
Source: Pitchbook. Deal activity as of 5/10/24. Valsoft, Visma, and Evergreen were excluded from PE-Backed acquirers as we consider these firms SaaS consolidators
#
Company
Deal Count
Notable Deal
1
13
ND
2
10
ND
3
9
ND
4
8
ND
5
8
ND
6
8
ND
7
7
$83M
8
6
$88M
9
5
$75M
10
5
ND
128
Other
359
138
Total
421
▪ Many of the PEs are built to add value in
their portfolios through acquisitions, which
includes not only capital, but experienced
manpower as well, with an unapologetic
mandate to do as many quality acquisitions
as possible
▪ The public strategics since even before
COVID, have reduced their velocity of
acquisitions, taking it down further post-
COVID
▪ Post-COVID, there has also been a big push
by strategics to integrate their COVID
acquisitions and improve profitability
▪
In recent conversations with Microsoft and
other big tech strategics, the large cap tech
companies have been single mindedly
focusing
on
building
out
and
commercializing
their
internal GenAI
capabilities over acquisitions. It may be a
world where big tech is providing the AI
platform
for LLM and
infrastructure
capabilities and many of the new GenAI
startups will be sector specific, leveraging
technologies for those platforms, like the
cloud market today
▪ The combination of
the acquisitional
acceleration in the PE community and
deceleration in the strategic community has
created a 4:1 differential in the volume of
PE portco acquisitions versus public
strategics
97
84
83
81
76
14
17
25
21
27
2023Q1
2023Q2
2023Q3
2023Q4
2024Q1
138 PE-Backed Portfolio Company Deal Count Since Q1 2023
#
Company
Deal Count
Notable Deal
1
8
$185M
2
6
$464M
3
5
ND
4
4
$975M
5
4
ND
6
4
$1,860M
7
3
ND
8
3
ND
9
3
ND
10
3
$460M
128
Other
72
138
Total
104
AGC’s 138 Public SaaS Deal Count Since Q1 2023
PE-Backed Portco Deal Count
AGC’s 138 Public SaaS Deal Count
AGC Partners
16
What’s Slowing SaaS Growth?
Source: Pitchbook, S&P Global. As of 5/10/24.
▪ After closing the books across the
Global Technology landscape for Q1
2024, we can only hope that what
was an abysmal quarter for revenue
growth at 13% and transaction
activity down 19% means we have
hit rock bottom
▪ Software customers are heavily
negotiating renewals and pushing
off the upsells, and new logo
prospects are much tougher to find
and convert
▪ A likely slowdown in both the U.S.
and global economies in the second
half of
’24 will continue the
headwinds
▪ AGC tracks roughly 34K private
software companies across
the
world,
many
of
which
are
recalibrating their expectations and
projections downward for business
in ’24
▪ We have hit the bottom from a
growth perspective and better
performance will be the biggest
driver
to
increased transaction
volumes.
▪ That said, there are reasons to be
hopeful
even
in
these
early
challenging days of 2024
2024
2021
2022
2019
2023
2020
Revenue Growth (%)
31%
14%
25%
5%
30%
8%
20%
30%
35%
25%
(10%)
10%
0%
5%
15%
Q1 Q2 Q3 Q4 Q1
(9%)
Q2 Q3 Q4 Q1
Q3
Q2
Q1 Q2 Q3 Q4 Q1 Q2
Q4
Q4 Q1 Q2
AGC SaaS Index
S&P 500
NASDAQ 100
Q3
Pre-COVID
COVID
Today
AGC SaaS Index
25%
31%
14%
NASDAQ 100
8%
30%
8%
S&P 500
4%
25%
5%
AGC Partners
17
Not All SaaS Companies Are Equals
Source: Pitchbook. As of 4/19/24. Note: Top, middle, and bottom 15 based on ranking by EV / ’24E revenue multiple.
▪ Rule of 40 Rules – the best 15
companies at 48% on Ro40
trade at 17.5x, and worst at
9% trade at 1.0x
▪ 83%
are
projecting
profitability because it is now
required
by most
public
investors
▪ There
is a
large drop in
revenue growth for the middle
from 22% to 14% between last
year and this year
▪ Publics and privates are back
to the boring fundamentals,
building better, sustainable
businesses
2024 Data Unless Specified
Top 15
Middle 15
Bottom 15
All 150
Revenue Multiple (TTM)
17.5x
5.9x
1.0x
5.8x
EBITDA Multiple
47x
15x
10x
21x
Rule of 40
48%
37%
9%
33%
Revenue Growth (’23)
27%
22%
1%
17%
Revenue Growth (’24)
25%
14%
0%
13%
EBITDA Margin
23%
23%
8%
19%
Gross Margin
79%
73%
69%
77%
R&D Spend
(% of Revenue)
28%
20%
21%
23%
S&M Spend
(% of Revenue)
42%
31%
30%
35%
Revenue / Employee
$297K
$294K
$217K
$263K
AGC Partners
18
Evaluating Growth’s Golden Impact
Source: Pitchbook. As of 5/10/24. Note: Deciles ordered by EV / LTM Revenue.
SaaS Index
Sector
EV/ ’24
Rev.
EV/ ’24
EBITDA
’24 Rev
Growth
EBITDA
Margin
Market
Cap
# of
Comps
DevOps
8.8x
42x
23%
9%
$6,495
8
Built
Ecosystem
7.9x
25x
11%
22%
$9,315
12
Cloud /
Data
6.1x
39x
16%
12%
$8,945
13
Cyber
Security
6.1x
29x
11%
22%
$6,115
18
C-Suite
5.7x
25x
16%
25%
$4,540
15
FinTech
5.4x
29x
18%
16%
$2,585
7
Europe
4.5x
20x
12%
31%
$1,005
9
MarTech
3.5x
21x
13%
19%
$1,885
18
HCIT
3.6x
13x
9%
22%
$1,275
8
Median:
5.3x
22x
13%
20%
$3,950
%
Breakdown by Sector/Geography
Decile
Median
EV / ’24
Rev
Median ’24
Revenue
Growth
Median ’24
EBITDA
Margin
Rule of 40
10
17.9x
23%
22%
45%
9
11.1x
17%
28%
45%
8
9.2x
17%
28%
45%
7
7.4x
15%
19%
33%
6
6.3x
15%
28%
43%
5
5.1x
17%
15%
32%
4
4.4x
11%
19%
30%
3
3.5x
10%
21%
31%
2
2.0x
6%
19%
25%
1
1.1x
0%
9%
9%
Total
Median
5.3x
13%
20%
33%
▪ There is a massive spread in valuations
now between the top SaaS decile, trading
at 17.9x revenues and the bottom decile,
trading at 1.1x, which also correlates with
Ro40 performance at 45% and 9%
respectively
▪
Interestingly, the top 9th and 10th deciles
are almost identical on Ro40, but the
differential in valuation is 17.9x vs. 11.1x,
and that lift is entirely driven by the 10th
decile’s superior growth rate, which is
23% versus 17%. Growth matters as much
as it ever has
▪ Looking at the bottom 3rd of SaaS
performers, you now have a wasteland of
45 companies with a median of 2x
revenues, which actually have a pretty
good Ro40 of 21% ☺
▪ We also see further disparity in valuations
by sector, as DevOps and Built Ecosystem
are now trading at 8.3x ’24 revenues while
MarTech and HCIT are trading at 3.6x
revenues. MarTech and HCIT companies
are predominantly small cap. Same is true
for European SaaS companies. Once again,
bigger is better in SaaS land
▪ A big part of that is not just sector, but
growth rates, as the lower performers are
growing at 11% and top performers are
growing at 16%
AGC Partners
19
Revenue Growth is a 2:1 Driver of Valuation Over Superior Profitability
Source: Pitchbook, as of 5/10/24. Note: Deciles ordered by EV / LTM Revenue.
0%
5%
10%
15%
20%
25%
2x
4x
6x
8x
18x
16x
14x
12x
10x
0x
10
9
8
7
6
5
4
3
2
1
Valuation vs. Revenue Growth
0%
5%
10%
15%
20%
25%
30%
2x
4x
6x
8x
18x
16x
14x
12x
10x
0x
10
9
8
7
6
5
4
3
2
1
Valuation vs. EBITDA Margin
R2=0.42
R2=0.83
EV / ’24 Rev
’24 EBITDA Margin
EV / ’24 Rev
’24 Revenue Growth
AGC Partners
20
Public SaaS Valuations Stabilize Over the Last 18 Months at 6x LTM Revenue
Source: Pitchbook. As of 4/19/24.
(2) Represents median EV / revenue multiples on AGC-
advised private deals. The latest reading of 9x is for 1H ’24.
(1) Represents trailing
30-day medians.
Oct ’22
Jan ’23 Apr ’23
Jul ’23 Oct ’23 Dec ‘23 Apr ’24
18.1x
Jan ’14
Jan ’15
Jan ’16
Jan ’17
Jan ’18
Jan ’19
Jan ’20
Jan ’21
Jan ’22
2x / 14x
4x
6x
8x / 21x
10x
12x
14x / 29x
16x
18x
20x / 36x
▪ Even with the recent run up
in
the public markets,
software
companies
are
valued
at
only
5.9x
revenues and have been
there for over a year now
▪ While the public market
peaked at the height of the
bubble at 18x revenue, our
private
SaaS
control
transactions stayed steady
at 7-10x and even today are
at roughly 9x
▪ An “A” SaaS story is still
generating 10-15x revenue
▪ EBITDA multiples
have
risen to 28x – public and
private
companies
are
primarily focused on profits
Public SaaS Multiples Are in a Longer Period of Stability Than We Have Ever Seen
5.9x
(EV / Rev.)
AGC’s Private
SaaS Deal
Multiples
AGC’s Public
SaaS Index
EV / TTM Revenue
EV / TTM EBITDA(1)
AGC-Advised Private
SaaS Deal Multiples(2)
9x
(EV / Rev.)
4.9x
8.1x
5.9x
2014-2016
2017-2019
Q4 ’22 –Today
Indicates median EV / revenue multiple by time period
AGC’s Public
SaaS Index
28x
(EV / EBITDA)
AGC’s Public
SaaS Index
Revenue / EBITDA multiple
18.1x / 32x – H1 ’21 Highs
10x – H1 ’22 High
7.0x
5.0x
AGC Partners
21
SaaS Companies’ Underperformance on Revenue Growth and Dearth of Public Strategic Buyers is Suffocating M&A Activity
Source: Pitchbook, 451 Research. As of 5/10/24. Note: M&A Value for 2024 excludes Synopsys’ acquisition of Ansys. Only 15% of deals since 2019 have a disclosed deal value
2024
2021
2022
2019
2023
2020
SaaS Company Revenue Growth (%)
27%
22%
31%
29%
14%
11%
14%
6%
20%
5%
10%
15%
20%
25%
30%
35%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2E
AGC SaaS Index
Revenue Growth
AGC SaaS Index
EBITDA Margin
Pre-COVID
COVID
Today
Revenue Growth
25%
31%
14%
EBITDA Margin
10%
14%
20%
▪ Growth slowed from 31% to 14%,
with 120 of the 138 public SaaS
companies
projecting
to
be
profitable, as the median EBITDA
margin has jumped from 6% to 20%
▪ CEOs and PEs are optimizing EBITDA
while trying to turn the tide on
revenue growth
▪ Premier revenue growth
is still
extremely hard to achieve, limiting
the supply of companies to bring to
market, putting a big wrench in the
M&A deal machine
▪ For the first time in Q4, EBITDA
margins, at 18%, exceeded revenue
growth, 15% - don’t expect these
lines to cross again until the IPO
engine starts revving again
▪ Deals are getting done but there are
fewer, they are smaller, and they are
not all perfect
▪ The COVID hangover from excess
technology consumption and inflated
valuations continues to subdue M&A
and IPO activity
3,800
4,300
5,000
5,300
4,300
’17-’19
2021
2022
2023
2024 (Ann.)
-19%
M&A Volume
$460B
$790B
$590B
$290B
$300B
’17-’19
2021
2022
2023
2024 (Ann.)
-35%
+3%
M&A Value
Year
’17 – ‘19
‘21
‘22
‘23
‘24 (Ann.)
Target FTEs
-
-
41
46
35
Avg. Deal Value ($M)
$55M
$108M
$45M
$38M
$40M
Disclosed Deals
607
1021
845
746
484
AGC Partners
22
How are Investors and Buyers Grading Enterprise SaaS Performance?
Confidential Materials. Do Not Distribute.
Key SaaS Metrics
What Are Core SaaS Performance Metrics?
Discount
Benchmark
Premium
ARR Scale
<$10M
$10-30M
$30M+
ARR Growth
<15%
15-40%
40%+
Gross Margin
<70%
70-90%
90%+
EBITDA Margin
<0%
0-20%
20%+
Gross $ Retention
<89%
89-95%
95%+
Net $ Retention
<100%
100-110%
110%+
Rule of 40%
<20%
20-40%
40%+
LTV:CAC
<3x
3x-5x
5x+
TAM
<$500M
$500M - $2B
>$2B
New to Upsell ARR
25:75
50:50
75:25
Top Customer Concentration
>25%
25-10%
<10%
Barriers to Entry
Low
Medium
High
Mission Critical
Low
Medium
High
% Recurring Revenue
<70%
70% - 90%
>90%
ASP
<$50K
$50K-$150K
$150K+
▪ Is it big enough for our fund size
or to move the needle for a
strategic?
▪ 15%
growth minimum
for
platform deals
▪ Lose a lot of the buyers with
gross retention less than high
80s%
▪ Rule of 40 is more like rule of 20
these days
▪ TAM needs to be more than
$500M so investors and buyers
have an exit pathway
▪ And not to be forgotten is the
new due diligence checklist item
of the impact AI has on virtually
every company’s future roadmap
AGC Partners
23
Strategics, Quiet in 2023, Are Powering Back in 2024
Confidential Materials. Do Not Distribute.
Source: 451 Research. Note: Data as of 3/15/24.
▪ The top 10 strategics were
down 42% in acquisitions in
‘23
▪ Strategics focused on their
performance and were not
so interested in chasing tech
companies
clinging
onto
COVID
days’
lofty
valuations
▪ Strategics
have
now
stabilized on both growth
and margins coming off their
COVID highs with lots of
cash, market cap, and a need
for hot new tech, as well as
new products
that will
expand their TAMs and
accelerate growth
▪ Strategics have already been
a bigger force in M&A in ‘24
Deal Volume of Top 10 Strategic Tech Acquirers (2018, 2020, 2023, and 2024)
97
74
56
101
2018
2020
2023
2024 (Ann.)
-42%
AGC Partners
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Key Takeaways for Those Doing Tech M&A in 2024
If you have a solid SaaS story with great metrics, the PE buyers are ready, willing, and able with $300B+ in their war chest
Most PEs continue to hold, not sell, their portcos for the time being. With many companies in the portfolio missing projections, PEs are holding on tight to their
strongest performers to show value creation and offset the losses. For the rest of the portfolio, they are also holding on until the companies perform better while
hoping that valuations improve. A few PEs are bringing companies to market, but not many. Those companies are performing well and are solid, but not their best
Strategics focused on organic performance in ’23 but are now more engaged on larger deals as valuations become more attractive
Debt markets had pulled way back, leverage ratios dropped from 6x to 3x, and the blended cost doubled from 6-7% to 11-13%, but now with big deals hard to find,
lenders are starting to offer higher leverage rations and lower rates
Slower technology spending continues in ’24 – the enterprise and consumer pullback in tech spend has directly impacted the revenue growth of our technology clients,
which has slowed all deal activity of $50m EV and larger. We expect a steady pickup as lower valuations become the new reality; sellers capitulate on realistic
projections and valuations; PEs make hard choices on which companies to put up for sale; and strategics jump back into the game
PEs were the go-to buyer for 2023 with strategics dialing back and IPOs highly limited – 23 out of AGC’s 29 deals in ’23 were PE-backed
Flight to quality – more PE dry powder than ever before (increased demand) with very few gold standard companies coming to market (limited supply) is driving
valuations to ’21 levels on “B+” or better companies in control transactions. As volume of companies on the market picks up, these supercharged valuations may come
down as both PEs and strategics will have many more quality companies to choose from
Bid-ask spreads – which remained wide in ‘23 – are tightening up in ’24 as the hyper growth rates and 50x valuations fall further and further into the past
Median SaaS valuations settle at 6x – SaaS valuations have been trading at roughly 6x revenue for over a year in a very tight band – that’s unusual. The last time they
traded briefly at this level was in 2017. Profitability is now required and rule of 40 is the gold standard. The market is far more rigorous and punishing, focused on
retention, mission-critical products, and efficient growth, with the outperformers trading at 13x revenues and the underperformers trading at 2x
Some CEOs with board control are jumping in: These CEOs with strong ’23 and early ’24 financial performance are driving most of our early ’24 new engagements
AGC Partners
25
Disclosure
Note: This document is for information and discussion purposes only, and it is intended for institutional and sophisticated investors. This document is based upon
sources believed to be reliable; however, we do not guarantee the sources’ accuracy. Unless otherwise indicated, AGC does not believe that the information
contained herein is sufficient to serve as the basis of an investment decision. There can be no assurance that the statements, estimates or forecasts (if any) will be
achieved and actual results may be materially different. The testimonials contained herein may not be representative of the experience of other customers or
clients. Testimonials are no guarantee of future performance or success. This is not a solicitation of an offer of any kind. To learn more about the
company/companies that is/are the subject of this document, contact one of persons named herein.
Confidential Materials. Do Not Distribute.