Thanks for pointing this one out - I totally missed it! At 2x EV/ARR and 1.6x EV/Total Revenue with 44% of revenues coming from the US, this is a great pick Gerry.
OK OK but what is the next step? I wouldn't only buy these companies hoping somebody will accuire them. Profitability metric is not on the slides. Doesn't PE firms care about profitability? How can we use this data to get rich?
Agreed - I wouldn't buy these companies just hoping for an acquisition either. The list was meant as a starting point for further research. Getting rich will depend on your personal strategy :-) I'd still take a long-term view when looking at these opportunities, but keeping in mind that a quick premium for an acquisition is a possibility.
In terms of profitability, it is important at scale but not as much in the early growth stages. Most of these companies are investing for growth and are not currently optimizing for profitability. That's why they tend to be valued on revenue or ARR multiples.
Maybe Pluribus Technologies Corp PLRB.V which is currently undergoing a strategic review. Company has 70% of recurring revenue and trades at ~0.07x Sales and ~0.65 EV/Revenue
Yes, Pluribus also makes sense and could definitely be an acquisition candidate! This one is a bit more risky though because of the amount of debt on the balance sheet. It will be interesting to see how they sort this out.
AirIQ (IQ.V) would be a good addition to your list.
Thanks for pointing this one out - I totally missed it! At 2x EV/ARR and 1.6x EV/Total Revenue with 44% of revenues coming from the US, this is a great pick Gerry.
OK OK but what is the next step? I wouldn't only buy these companies hoping somebody will accuire them. Profitability metric is not on the slides. Doesn't PE firms care about profitability? How can we use this data to get rich?
Agreed - I wouldn't buy these companies just hoping for an acquisition either. The list was meant as a starting point for further research. Getting rich will depend on your personal strategy :-) I'd still take a long-term view when looking at these opportunities, but keeping in mind that a quick premium for an acquisition is a possibility.
In terms of profitability, it is important at scale but not as much in the early growth stages. Most of these companies are investing for growth and are not currently optimizing for profitability. That's why they tend to be valued on revenue or ARR multiples.
Thanks for your comment/questions Adamo!
Maybe Pluribus Technologies Corp PLRB.V which is currently undergoing a strategic review. Company has 70% of recurring revenue and trades at ~0.07x Sales and ~0.65 EV/Revenue
Yes, Pluribus also makes sense and could definitely be an acquisition candidate! This one is a bit more risky though because of the amount of debt on the balance sheet. It will be interesting to see how they sort this out.