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The Winning LOI [Vol. 2, Issue 20, No. 23]


Welcome to the latest issue of The Winning LOI, the Axial newsletter that anonymously reveals small business M&A valuation data and certain key deal terms associated with winning LOIs.

Sign up to receive the Winning LOI newsletter here.

In this issue, we dive into the M&A valuation data and key LOI deal terms for a security software company specializing in risk management and compliance software. The company reported a revenue range of $2.5M – $3M and EBITDA range of $1.25M – $1.5M in 2019 before confidentially going to market via Axial in Q2 2020. After spending 40 days in market, the Winning LOI was executed by a search fund that successfully closed the deal 122 days later.

Software deals are among the most prominent in the technology sector for deal activity on the Axial platform. Here is the breakdown from the last 12 months:

Looking to exit in Software? Find an advisor you can trust.

See below for Winning LOI #23’s anonymized data ⬇️

The Deal
Deal TypeChange of Control
Revenue Range (2019)$2.5M - $3M
EBITDA Range (2019)$1.25M - $1.5M
EBITDA Margin Range45% - 50%
Key IndustriesTechnology, Software
In-Market DateQ2 2020

Axial Deal Data
# of Pursuits*23
Deal Pursuit Rate*20.72%
Winning LOI Pursuit to LOI Executed40 Days
Winning LOI Executed to Deal Closed122 Days

Total Enterprise Value (TEV) Range$11.5M - $12M
EBITDA Multiple Range (2019) 8.25x - 8.5x
Exclusivity60 Days
➡️ Cash93.3% of TEV
➡️ Rollover Equity6.7% of TEV
➡️ Seller Note
➡️ Earnout

Axial Sell-Side Member Data
Member TypeInvestment Bank
Total Deals Marketed on Axial25
Average Annual Deals Marketed6
Average Revenue of Deals$8,910,151
Average EBITDA of Deals$622,458

Axial Buyside Member Data
Member TypeSearch Fund
Number of Acquisitions1
Buyside Pursuit Rate*19.52%
Buyer Responsiveness Rate*90.49%


*Recommendations: Axial sell-side members receive a matching set of buyside members for every deal they manage via Axial. A buyside recommendation refers to a specific buyside Axial member who matches a particular deal.

*Recipient: A recipient is a buyside member who has been granted access by an Axial sell-side member to review a particular deal.

*Pursuit: Axial buyside members express initial interest in a deal by clicking “Pursue”, after which they can access and sign the NDA.

*Deal Pursuit Rate: The deal “Pursuit Rate” is defined as the number of times a particular deal is pursued by unique buyside members (i.e. the buyer shows explicit interest in exploring the deal) divided by the total number of buy-side firms invited to evaluate the deal

*Buyside Pursuit Rate: The buy-side “Pursuit Rate” is defined as the number of deals pursued by a particular buyer throughout an entire Axial membership term, divided by the total number of deals sourced during the same timeframe.

*Buyside Responsiveness Rate: The buyside “Responsiveness Rate” is defined as the rate at which a member responds to teaser shares within 5 days. The calculation initiates when a member has a minimum of 10 teasers and is calculated based on the member’s last 100 teasers received.

Disclosures: All data presented in The Winning LOI is anonymized to respect and protect the confidentiality of Axial members and their transactions. Data is provided to Axial by Axial members in accordance with the Axial Member Terms of Service. Axial has endeavored to present data accurately, but Axial does not and cannot fully verify the accuracy of the presented information. Information contained in The Winning LOI is for informational purposes only, and does not represent investment advice or recommendations of any kind.

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