Alongside double digit LFL growth, synergistic tuck in acquisitions are a perfect way to further accelerate the top line for high margin Saas businesses. Particularly where 'bolt-ons' add system capability and offer new clients for cross/upsell opportunities
Enter, Elecosoft a specialist Buildtech software developer for all things project management, visualisation and the maintenance of property assets.
Today the company announced that it had acquired Kivue Limited, a leading UK-based Saas provider of Project Portfolio Management (PPM) software for £2.3m - split £1.84m in cash and 337,363 of new shares (£0.46m) at approx 136p each.
To me this is an astute move, since Kivue Limited's 1st class solutions are intuitive, easy-to-use and highly agile with notable customers such as London City Airport, Aon, Bentley, Virgin Atlantic and The Government of Jersey.
Wrt the deal multiples, Kivue delivered Oct FY’25 revenues and adjusted EBITDA of £1.5m and £0.2m respectively – thus putting the transaction on 1.5x EV/sales and 11.5x EV/EBITDA.
CEO Jonathan Hunter commenting: "Kivue, with its Perform offering, complements our existing BestOutcome's PM3 solution which is used to manage strategic programmes and multiple portfolio management projects by Project Management Offices and Project Managers. The addition of Kivue Limited will further expand our reach into a senior manager and C-Suite audience for larger enterprises."
"We are impressed with the calibre of customers which Kivue services, as well as the commercial knowledge, experience and talent of its team. In addition, we are pleased that the operational management team of Kivue will remain with the business to supporting our joint PPM growth ambitions."
Finally in terms of the numbers, house broker Cavendish (Target Price 250p/share) is 'conservatively' anticipating FY26 turnover, EBITDA & EPS of £43.9m (+13%), £10.6m and 6.6p respectively (nb. Kivue Limited not yet included). Which hypothetically putting the stock on 4x EV/sales, would generate an intrinsic worth of over 220p/share. In comparison, larger listed peers Autodesk, Nemetschek & Bentley Systems who all trade on circa 6x forward turnover and 16x-20x EBITDA multiples, as opposed to 2.4x & 10.6x for Eleco in FY’26 (at 147p).
Disclosure: I own shares in Elecosoft, who is also a Vox Markets client