Precisely what I thought. It looks like their annual revenue is ~ $1 billion, placing this price around 15x annual revenue.
However, Looker has about $131 million in revenue, so their purchase price was an even higher 20x annual revenue.
My conclusion is that these acquisitions are much less about sales revenue and much more about filling strategic holes in product offerings, and I can only assume it's a sellers market in that area.
Multiplers don't scale linearly. The lower your valuation, the more possible it is to get a higher multiple for various reasons (cash, # of bidders in the market, etc).
At $1B/year in revenue there aren't a lot of companies that can realistically acquire you. At $131MM/year, there are.
Precisely what I thought. It looks like their annual revenue is ~ $1 billion, placing this price around 15x annual revenue.
However, Looker has about $131 million in revenue, so their purchase price was an even higher 20x annual revenue.
My conclusion is that these acquisitions are much less about sales revenue and much more about filling strategic holes in product offerings, and I can only assume it's a sellers market in that area.