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by cdelb 3425 days ago
check out feinternational.com (OP mentioned them as well). I've been subscribed to their "Buyers list" for over a year and I've seen many nice saas businesses listed.
1 comments

Interesting, the multiples are 3-4x profit on that site. Is that pretty standard for SaaS?
From what I can tell, yes - at least for businesses that aren't experiencing high growth rates. FE has written an excellent article on the subject:

https://feinternational.com/blog/saas-metrics-how-to-value-s...

It's the last quarter's numbers annualized to a year so if there's been a spike in the last quarter that isn't seen in prior financials that's a point for negotiating the price. And it's also based on discretionary income so that "profit" is not necessarily the actual profit the business took in. A lot of expenses are considered discretionary but probably have a positive ROI.

So while 3-4x is normal (really 3-5x depending on the industry) the numbers on FEI tend to be a tad high but not unreasonably so.

Would you recommend looking any where else?