Datto sets initial IPO price range, indicating a valuation of around $4B – ClearTips
Datto this few weeks ago, ClearTips called it a “backup and disaster recovery firm”, which was publicly recorded. The firm set an initial threshold for its debut this week.
Vista equity partners The company was withdrawn in 2017 by a private equity firm. Vista has recently been back in the news for a number of reasons, a few things stemming from Executive Sheenigans – read: tax evasion and heavy fines – but at least what is good news from Diego’s camp.
how so? Vista bought Datto for about $ 1.5 billion, and is set to make billions upon its exit, based on the company’s expected IPO pricing.
According to the data firm’s latest S-1 filing, Datto is targeting a $ 24 to $ 27 per share price range. Here is the math:
- Total shares outstanding after IPO, allocation of underwriters: 157,548,740 shares
- Total shares outstanding after IPO, with allocation of underwriter: 160,848,740
- Maximum valuation at current prices, allocation of monks: $ 4.25 billion
- Maximum valuation at current price with underwriter allocation: $ 4.34 billion
Those two last numbers dramatically exceed the $ 1.5 billion that Vista is asked to pay for Datto.
How has Datto generated so much value over the years? Financially, the company grew to a run rate of approximately $ 500 million, based on its Q1 and Q2 2020 revenue results. This gives the company a revenue of less than 10x maximum at its current IPO price.
And that price makes sense. For example, Datto is not growing very fast, just 16% from H1 2019 to H1 2020. The company recently became profitable, helping with its valuation case. But more importantly, between 2017 and 2020, we have seen revenue multipliers for expansion of software companies. Since 2017, the growth of Plus Datto has kept it well above its selling price.
For Vista, this is good news. Provided that they do not fall into tax issues on this particular set of returns. More on Datto as it prices and debuts.