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Medium news, startups: If you start generating cash, you can sell for 4x ARR

Date 07 Feb, 2024

Writen by Alex Wilhelm

Position Editor In Chief, TC+

The 2024 IPO season is on the horizon, but until those S-1 filings drop, we at least have private equity M&A to keep us busy.

This week, Everbridge said it had agreed to be taken private by Thoma Bravo for $1.5 billion in an all-cash transaction — a roughly 50% premium on its market cap before the deal was announced.

The Everbridge deal is good fodder for better understanding exit prices for technology businesses today. Over the past few years, the company has gone from being a fast-growing software business to a slower-growing but more cash-generative entity, so its exit price has a few lessons for founders.

Everbridge helps governments and enterprises from across the industrial spectrum respond to emergency situations, and it operates in a market that could prove fertile provided global political and meteorological instability continue to ratchet higher. Lately, however, its growth pace has rapidly decelerated.

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