4 ms·
$200mm for a $70mm in revenue company seems very cheap, no?
by mathattack 6y ago
$200mm for a $70mm in revenue company seems very cheap, no?
- AznHisoka 6y agoDepends on the growth rate. If it’s flat growth, it’s not cheap at all.
- mathattack 6y agohttps://www.geekwire.com/2020/chef-hits-key-financial-milestone-digital-boom-fuels-demand-software-automation/ https://www.geekwire.com/2020/chef-hits-key-financial-milest... “100% growth in incremental recurring revenue” doesn’t say much if they are churning a lot of existing customers. (That they chose such a double-speak revenue number perhaps says a lot). My impression was that DevOps software like this is very hard to pull out once you’ve embedded it in the org. Am I missing something?
- nixgeek 6y agoThey gave the milk away for free. You only needed to pay if you wanted their super-opinionated delivery pipeline or needed lots of support using Chef. I worked in a couple places which used Chef and paid for 1-2 years but eventually terminated the commercial relationship.
- andruby 6y agoJust to clarify, that would be buying a company with "$70 million in annual recurring revenue" [0], for the price of "$220 million in cash, subject to customary adjustments" [0]. We don't know anything about the profitability or the growth. I can imagine that their growth is flat or even declining. [0] https://investors.progress.com/news-releases/news-release-details/progress-announces-acquisition-chef https://investors.progress.com/news-releases/news-release-de...
- dcolkitt 6y agoThe S&P 500 in aggregate is valued at 2.4 price-to-revenue.
- mathattack 6y agoI would think the tech number is much higher.