subscale fao faas deal multiples snapshot

1. ERGO Comps, LLC
O: 281.756.7178
www.ERGOcomps.com
Private Company Deal Multiples
Subscale Deal Multiples for Cloud Accounting, FAO,
F&A, FaaS, Professional Services Accounting
Illustrative subscale deals <$25m reflect <0.5X to 4.3X revenue multiple, premium paid for tech
and industry capabilities
2019 - CBIZ (NYSE: CBIZ) acquires The Wenner Group (outsourced F&A CPA with 14 EE and $2.4m revenues).
2019 – JTC Group acquires Exequtive Partners, FAO w/ CXO-CFO partners fractional, plus corporate secretarial support (28 EE) for $25m.
2018 – Cardiff Lexington acquires Platinum Tax Defenders for $2.13m, at 0.68x EV/revenue.
2018 – WAVE acquires London Instafile, cloud tax filing solution with $1.5m annual revenues for $6.9m (4.6x EV/rev) to enter UK market.
2018 – National Holdings acquired Giman for $14.2m, 0.38 revenue multiple, 11.6 EV/EBITDA
2018 - Alight acquired Carlson Management Consulting (Sage Intacct & AdaptiveInsights partner) with $5.6m in annual revenues and 34 FTE).
2018 – InfoSys Management acquired by SWK Technologies. Reseller of SAGE and Acumatica solutions acquired for $1.7M.
2018 – AcctTwo acquires Leap The Pond ($3.7m, 16 EE).
2017 – Accretive Solutions acquired by RGP – Resources Global Professionals, FAO acquired for $19.4m (500 EE, <1X Rev, 4X EBITDA).
2017 – BG Finance & Accounting acquires SmartResources fpor $8m, 0.6x EV/revenue.
2017 – Gee Group acquires SNI Companies for $86m at 0.8x EV/revenue.
2016 – RealPage acquires NWP Services provider of backoffice services for $68m at 11.3x EBITDA, 1.2X revenues.
2015 – Willis & Walsh CPAs acquired for .77X EV/Sales, 4.4X SDE and EV/EBITDA multiple on $1.042m in total sales.
2014 - Monchilla acquired by Xero for $4.1m plus stock (>4x Rev/EV).
2013 - Control Solutions, F&A, acquired by Staffing 360 Solutions Inc (NASD: STAFF) for 0.2x EV/sales and 13.2X EBITDA at $7.24m sales.
2005 – Carpathia Financial Services LLC consulting & staffing acquired for $26m by Chicago Growth Partners LLC, via Peppertree Capital.
Backoffice Administration Services Industry Commentary
 Continual movement of larger accounting firms acquiring non-CPA firms.
 Deals driven by digital transformation, industry consolidation, & shift to the cloud.
 Growth in FAO market driven by demand for cloud solutions, F&A optimization, spend
efficiencies, and analytics.
 Majority of service deals priced 80% to 100% of annual revenues, with outsourcing deals
commanding a premium.

2. ERGO Comps, LLC
O: 281.756.7178
www.ERGOcomps.com
Backoffice Industry Deal Values
EV to Sales Multiple Analysis by Industry
Acquisition Exit Multiples Analysis since 2000
*Overlap exists. This list is not exhaustive, but merely illustrative.
Industry EV to Sales Multiple Min Max Count Min Purchase Price Max
Accounting 0.86 0.10 1.72 51 $27,500 $14,240,000
Bookkeeping 0.93 0.54 1.46 25 $40,000 $428,500
Business Services 1.35 0.01 58.69 484 $18,000 $93,212,000
Consulting 1.17 0.13 9.11 90 $40,000 $82,121,325
Marketing 2.34 0.04 24.36 71 $35,000 $93,212,000
Outsourcing 1.37 0.48 2.61 3 $902,048 $4,263,180
Payroll 1.20 0.02 2.90 13 $80,000 $17,348,000
Staffing 0.54 0.00 3.89 148 $30,000 $87,400,000
Tax 0.86 0.08 3.32 78 $18,000 $50,363,000
TOTAL 1.20 0.00 58.69 963 $18,000 $9,463,000,000