Volset: Brokered sales anchor strategic acquirers to lower private equity multiples
Einar Volset · Einar Volsett on How TinySeed Works · Jun 10, 2020 · at 57:18
Einar Volset, SaaS M&A advisor at Discretion Capital, explains to Nathan Latka why outlier 15x–30x revenue acquisition offers only happen outside formal banker-led processes.
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“If you really want to get 30 X revenue or 20 X revenue or 15 times revenue it's hard to do that if you're in like a sales process with a broker. Like if a broker is going out to market, then the strategic knows that, okay, there's a floor in pricing because here's what the private equity companies and guys are willing to pay. So I'll just go in slightly above that. So then they might come in at nine, 10, 11, maybe seven, eight, nine, 10, 11. But if you're not in the process and they really want to, then they're not really fighting the other buyers at the table. They're fighting you not wanting to sell because you have these big visions and you're like, well, I don't want to sell unless I get a ludicrous price and you name the ludicrous price.”
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