SaaS Business Brokers

Mergers & Acquisitions and Business Brokerage Services for the SaaS Industry

Raincatcher’s Partners and Managing Directors have completed over a billion in combined transactions throughout their careers. We offer an investment banking style auction process to lower middle market companies.

Our award-winning team is largely comprised of former small business owners, public accountants, and middle-market investment bankers. Our clients have trusted us to sell over $500M in small and mid-sized businesses.

How We Work With Our SaaS Clients

If you’re interviewing M&A advisors and business brokers in search of someone who understands your SaaS business, has a strong buyer list of investors (including family offices, private equity funds, search funds and entrepreneurs), and has proven experience in closing deals, then you’re in the right spot.

While we call ourselves industry agnostic, we avoid a handful of industries, such as reimbursement-related healthcare, energy, life sciences, etc. Likewise, our team is very well-versed in a handful of industries. This list includes manufacturing, SaaS, tech, niche manufacturing and industrials.

We have had success with both vertical business SaaS and in consumer-facing application SaaS. If you are entertaining selling your SaaS company, start by requesting a consultation with us to learn about our process, or have a read of our how to sell a saas company article.

Valuation Specifics for SaaS Businesses

SaaS businesses are in a category of their own when it comes to both valuation multiples and desirability from investors. Private equity groups typically look for $3m+ in annual EBITDA in every other industry before they make a purchase offer on a business. However, because recurring-revenue SaaS is so desirable, many investment groups will look at buying SaaS companies as small as $1m in ARR.

While the vast majority of businesses sell on multiples of their adjusted EBITDA, if your SaaS company has recurring revenue and is in rapid growth mode and reinvesting back into development and into marketing, offers will often be made on a revenue multiple. Or, a multiple of recurring revenue.

Below is an outline of what makes SaaS companies most desirable from an investor’s perspective.

  • 90% + gross margin. (Minimal ongoing development costs)
  • Proof of concept, ideally with 10%+ YOY growth.
  • Highly regarded SaaS from your consumers. This will also end-up with your SaaS having low churn
  • Mission critical Service. Safety, compliance filing, data hosting, etc.
  • Business-facing is typically more desirable than consumer-facing SaaS.
  • A total addressable market of less than $500m. Any larger and you have the potential to get knocked off by larger software companies.
The Raincatcher Process

Our Specialized M&A Advisory Auction Process for SaaS Companies

Our M&A Process is Specifically Designed to Maximize Transaction Proceeds and Terms for our Clients with $500k+ in Annual EBITDA

Sell-side due diligence

Due diligence is traditionally done by business buyers and not business brokers. However, our comprehensive sell-side process includes a diligence process before we bring a business to market. Learn more about diligence on our M&A consulting post.

Our comprehensive diligence process is designed to drive the highest value for the business owner as buyers know that there won’t be any skeletons in the closet once they submit an offer and start spending money on legal and financial diligence.

Specially designed brokerage or M&A auction process

Depending on the size of your business and industry your company operates in, we may recommend a traditional brokerage process with a listing price. Or, a competitive auction process with buyers submitting the price and terms for negotiation. 

Our buyer list is comprehensive and will be tailored to include (or exclude) and participants in your industry who may make great strategic buyers or who you want to avoid knowing the business is on the market.

Short-listing finalists

It isn’t uncommon for strong, sizable companies to get 5+ indications of interest (soft offers). We’ll then validate those buyer groups, attend dinners where they meet out clients, prepare further data on the business and negotiate the deal terms that buyers will propose in their final offer.

Negotiate LOI terms and facilitate diligence

Once LOI’s have been received from potential buyers we work with our clients to select the most attractive offer before executing the exclusive LOI.

It’s common for diligence to take 60-90 days before closing. This requires a significant time commitment from all parties. Additionally, final deal points are negotiated and contested during this period.

More SaaS Resources

If you’re interested in selling, have a look at our SaaS business valuation multiples article.

What Our Clients Have to Say

Request A Consultation

If you’re a business owner and you are currently entertaining selling your business in the coming years, we welcome the opportunity to get introduced to discuss our M&A, Exit planning and Advisory services.