On December 1, 2020, Salesforce announced its plans to acquire Slack for $27.7B. Slack is a direct business messaging and group chat platform with intuitive and easy-to-use design. Salesforce CEO, Marc Benioff, said, “Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world”. This marks the biggest E-Commerce and Tech industry acquisition this year, to date. Below is Slack’s timeline and deal history, starting from the $1.5 million seed round in 2009 to the announced $27.7 billion acquisition by Salesforce:
Precedent Comparable Transactions: E-Commerce
Main Street companies (below $5,000,000 in revenue) in the E-Commerce industry (NAICS 4541) had an SDE1 Median Valuation Multiple of 2.7x, based on 25 transactions between 2015 and 2020.
Middle Market companies (above $5,000,000 in revenue) in the E-Commerce industry (NAICS 4541) had an EBITDA2 Median Valuation Multiple of 6.5, based on 10 transactions between 2009 and 2019.
If you’re contemplating a sale of your ecommerce or simply would like to understand your options, contact a Sunbelt Advisor today. We have closed multiple transactions in the ecommerce industry and have industry specialists ready to answer any of your questions.
1Seller’s Discretionary Earnings – Seller’s discretionary earnings is defined as net profit before taxes and any compensation to owner plus amortization, depreciation, interest, other non-cash expense and non-business-related expense and normally to one working owner. (Source: BV Market Data)
2Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) – EBITDA is Net Income with interest, taxes, depreciation, and amortization added back to it. EBITDA can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions. However, this is a non-GAAP measure that allows a greater amount of discretion as to what is (and is not) included in the calculation. This also means that companies often change the items included in their EBITDA calculation from one reporting period to the next. (Source: BV Market Data)
