It's only been a few weeks since Datto, What TechCrunch called a "backup and disaster recovery company" was floated on the stock exchange. This week the company set a first area for its debut.
The Vista Equity Partner The company supported by the private equity firm was picked up by the private equity firm back in 2017. Vista has been back on the news in recent years for several reasons Embassy.
How come? Vista bought Datto for approximately $ 1.5 billion and will make billions upon its exit based on the company's expected IPO prices.
According to the data company's latest S-1 filing, Datto is targeting a price range of $ 24 to $ 27 per share. Here's the math:
Shares outstanding after the IPO without allocation of subscribers: 157,548,740 shares
Total number of shares outstanding after the IPO with allotment of subscribers: 160,848,740
Maximum valuation at current prices with no insurer allocation: $ 4.25 billion
Maximum valuation at current prices with insurer allotment: $ 4.34 billion
Those two final numbers are dramatically larger than the $ 1.5 billion Vista is said to have paid for Datto.
How has Datto managed to generate so much value over the past few years? In financial terms, the company grew to a running rate of approximately $ 500 million based on Q1 and Q2 2020 sales results. This gives the company a sales multiple of less than 10 times its current IPO price max.
And that price makes sense. Datto is not growing very fast, for example only 16% from H1 2019 to H1 2020. However, the company has recently become profitable which helps its valuation case. More importantly, however, between 2017 and 2020, the revenue multipliers for software companies rose many times over. This and Datto's growth since 2017 have brought it well above its retail price.
This is good news for Vista. Provided they don't deal with tax issues related to those particular returns. More on Datto as there are prizes and debuts.