Recent industrial sales of Swedish business critical hosting/outsourcing companies indicate a strategic demand for this capability.
Sales weighted multiple for the recent strategic transactions in Sweden is (EV/Sales) 2.1.
This surge in multiple is high compared to the same multiple for the key listed Nordic companies (sales weigthed EV/Sales) of 1.0.
Given the industrial dynamics, these strategic premiums are probably short-lived and will decrease. For example, in the test services industry, multiples peaked around EV/Sales of 2+ in 2007-2008 and current levels are much lower with EV/Sales around 0.6.
Ablona recommend owners of companies in the business critical hosting/outsourcing industry to look into the opportunity of becoming part of a larger industrial company.
Also, actors in industries connected to business critical hosting should investigate how these acquisitions impact their sustainable competitive advantages.
Please contact us for more details and to discuss this opportunity.