SaaS buyout median falls to 11.7x as three continuation vehicles close unpriced

Forvis Mazars and PitchBook put the median EV/EBITDA on private equity SaaS deals at 11.7x in the first half, down from 20.4x, across 702 transactions worth $58.8 billion. The fall amounts to 8.7 turns, close to 43 percent, and the data appeared in coverage that also carried the week's secondaries closings, three GP-led continuation vehicles that closed with no price disclosed for any of them.

The two sets of numbers come from different markets and invite the same question. A buyout median is the midpoint of 702 sponsor transactions, each valued against EBITDA, which dates the level at which the middle of the SaaS buyout market cleared in the first half. A continuation vehicle is a different kind of transaction, one in which an asset moves out of an older fund into a successor vehicle with fresh capital behind it and the price is whatever the buyer and the manager agree. The buyout multiple prices none of the three vehicles that closed. What it supplies is a current figure for SaaS assets in a transaction form that publishes data.

The multiple's reach shows up in the gap it leaves behind. At 11.7x, a company generating $10 million of EBITDA values at $117 million; at the prior median of 20.4x, the same company comes to $204 million. At $50 million of EBITDA the spread runs from $585 million to $1.02 billion. No business trades at a median and no continuation vehicle has to be struck at either figure, but the 8.7 turns measure the distance between an entry point set in a hotter market and the current middle of the buyout market, and that distance is what a discount has to cover.

Two other figures belong alongside the multiple. The 702 transactions and $58.8 billion of value average out to roughly $84 million per deal, a reminder that a median drawn from that many transactions describes a broad population rather than a benchmark company. The coverage gives the median and the total deal value but no quartiles, so there is no way to see the dispersion around 11.7x. And a median is a midpoint: it says nothing about the top or the bottom of the range, so borrowing the figure for a particular portfolio means applying the middle of a distribution to an asset that sits somewhere inside it.

The week's coverage mixes two secondaries forms, and the buyout median sits at a different distance from each. A GP-led continuation vehicle moves an asset, or a small group of them, into a new fund that the existing manager keeps running; an LP-led sale moves an investor's stake in one or more funds to a buyer. The analogy to a buyout multiple breaks beyond the transaction form anyway: a buyout multiple is struck on EBITDA in a control sale, while a buyer of a fund stake is pricing a share of a pool, with the manager's terms and the portfolio's remaining life folded into what that share is worth.

Center Rock's continuation vehicle for Power Services Group closed, led by New 2ND Capital, and PE Hub's report carried no price, no vehicle size and no rollover terms. Power Services Group is a Cape Coral turbine-parts supplier, so the SaaS multiple has no read-across for two reasons: the asset sits outside the population of sponsor software deals, and the vehicle's economics were not published in the first place.

The rest of the week's secondaries closings followed the same pattern. Sun Capital's Anderson Global closed with no price, no size and no named lead buyer, and a third continuation vehicle closed unpriced as well, with the coverage identifying neither the vehicle nor its terms. In one deal the lead was named and the price was not; in another, not even the lead was named. Naming a lead is evidence that a buyer committed capital at some price. It is not evidence of what that price was.

Where a continuation vehicle's economics would surface is in two places: the price at which the asset moves into the new fund, and the terms on which existing limited partners choose to roll their stakes or sell. Neither appeared in the week's coverage. The closings established that transactions happened, and nothing about the level at which they happened.

The week's one dollar figure belonged to a fund rather than a portfolio. Ibex closed its second Israel-focused secondaries fund at $87 million, more than doubling its predecessor, AltAssets reported. Commitments of that kind measure how much capital limited partners will hand a manager. They say nothing about the level at which the assets that capital will buy have changed hands, and in a secondaries strategy the price paid for assets does more to determine the outcome than the size of the pool it is paid from.

Closing and pricing are separate events, and the week produced plenty of the first. A continuation vehicle closes when the new capital is committed and the asset transfers, while the amount paid for the asset and the split between limited partners who rolled and those who sold stay with the parties. An LP-led sale runs the same way from the other end, with a buyer and a seller agreeing a discount to net asset value that circulates between them rather than in a press release. Fund closings get announced as a matter of course, because their size is a fundraising statistic. That difference in disclosure is why the week's coverage carries one $87 million figure and no price for any of the assets that changed hands.

Continuation vehicles and LP-led portfolios are priced by negotiation, and the terms of those negotiations are not in the week's coverage: PE Hub put no asset-level price on the Center Rock vehicle, and the other two closings were no more forthcoming. That leaves anyone working from the public record with the direct market as the nearest available reference, the same asset class in a different transaction form. Whether a secondaries buyer applies the buyout median is a judgment for each negotiation, and the data cannot settle it.

Of the three closings, only Power Services Group is identified, and it is an industrial asset. The coverage does not say what the other two hold, which means the SaaS median reaches them, if at all, as a market-wide reference rather than as a comparable transaction. A turbine-parts supplier and an unnamed vehicle give nobody a software comp; the 11.7x arrived in the same week's coverage, not in the same market.

Where the number bites is in the distance between an old basis and the current median. An asset underwritten against the earlier market carries a higher implied entry point than the current figure supports, and a buyer working from the median can point to a published gap. That does not establish what any particular vehicle's assets are worth, and it does not show that any seller is anchored to the higher level. It does mean the seller's case has to rest on the asset rather than on where the market cleared earlier.

What that gives a holder is a reference point rather than an answer. A fund interest in a software-heavy portfolio is not valued by a buyout median, and a GP-led vehicle's marks come out of its own process, but when a sale or a rollover comes up, both sides can look up the same published number. A buyer is likely to cite the median; the argument is then asset by asset, which is where a negotiation over a software portfolio lands.

Three things would move the picture. A software-heavy continuation vehicle or LP-led portfolio closing with a price attached would give the secondaries side a print of its own; the next Forvis Mazars and PitchBook reading would show whether the median was a floor, a waypoint or a step; and the third continuation vehicle from the week, unidentified in the coverage, would at least put a name on the list. The Ibex close answered a different question, whether investors will commit capital to secondaries strategies at all, and it answered that one with more than double the predecessor fund's total.

Until one of those lands, the closest published marker for what a SaaS asset is worth is a buyout median drawn from sponsor deals in the first half, with no secondaries price in the week's coverage to set against it.