We are thrilled to announce our upcoming Meeting, set to take place on May 9th and 10th in the beautiful city of Porto. This event presents a singular opportunity for members of our network to come together and delve into the realm of cross-border transaction opportunities.

Throughout two intensive days, representatives from the 11 countries where Dealbridge operates will convene to share best practices, tackle challenges, and explore the unique opportunities that arise when conducting negotiations across international borders.

Specialized panels will be a key feature of the event, and we are particularly excited to highlight the presence of venture capital and private equity funds, such as HCapital Partners. They will deliver presentations and stimulate discussions centered around the internationalization strategies employed by their subsidiaries and the potential for cross-border transactions.

We are also privileged to welcome the renowned Spanish international brand GOIKO, who will showcase their joint venture strategy as a potential avenue for entering select countries where Dealbridge has established a presence.

Additionally, we will be joined by an expert from INVEN.AI, an intelligent business data platform that leverages cutting-edge AI and NLP models to analyze millions of websites and extract pertinent business data.

The event will culminate in Brainstorming Sessions, where teams from all 11 countries will engage in valuable exchanges of ideas and foster the creation of opportunities for future collaboration.

Why should business owners care about their revenue structure, especially when they are considering a sale in the near future?

The recurring revenue business model gets a lot of attention in M&A activities, especially when discussing the purchase price. The EV/revenue and EV/EBIT multiples paid for companies that incorporated software-as-a-service (SaaS) – based business models are significantly higher than software firms with an „On-Premise“ business model. The value of the recurring revenues in the software industry is uncontested.

But there has also been a massive strategy shift in terms of revenue composition in other industries like distribution (think of #Amazon prime), news & media (think of #Netflix), consumer discretionary goods and services (think of #Dollar shave club), healthcare and financial services. But even large industrial and capital businesses, have incorporated recurring revenue streams in their “business-as-a-service” model.

There are several reasons why businesses are shifting towards the recurring revenue model, but the main reason is inherently better predictability of revenues, earnings, and cashflows. This helps the management and owners of a company in budgeting expenses, stocking inventory, and investing in growth and expansion.

When it comes to M&A activity, a high ratio of recurring revenues means that there is less risk and a better base for expansion for potential buyers, which also leads to better conditions in the financing of the transaction and ultimately to higher valuations.

Author:

Simon Fabsits, MSc
Dealbridge M&A Advisors Austria & Liechtenstein