Valuation and Value of Software Maintenance Revenue Stream

Nov 21

adminAcquisition, Valuation Maintenance, Multiple, Revenue, Rule of Thumb, Software, Valuation 1 Comment

A rule of thumb for the acquisition value of a revenue stream from software maintenance is 3 to 4 times trailing twelve months revenue (3-4x revenue multiple). This assumes that the maintenance stream has a high renewal rate (typically in the 85% to 90% range) with high gross margins (80% or higher).

One Comment (+add yours?)

JamesD
Jun 11, 2009 @ 03:47:08

Thanks for the useful info. It’s so interesting

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