The San Deigo-based Autodesk is especially useful in providing a litmus test of valuations because it is an expert at mergers and acquisitions, having bought about 150 companies over the past decade.
It is paying 19 times Altium’s revenue for next year and 50 times next year’s earnings before interest, tax, depreciation and amortisation, according to S&P Global Market Intelligence.
The revenue multiple is high relative to about 20 other similar software company takeover transactions over the past four years.
The proposed offer of $38.50 a share was a 42 per cent premium to Friday’s close and a 47 per cent premium to the one-month volume-weighted average price.
Altium chairman Sam Weiss put his name on the company’s response to the Autodesk proposal, but had no time to talk. He has left open the possibility that the company will be open to a higher offer.
But at this stage, the company is saying the offer “significantly undervalues Altium’s prospects”.
It is hard to understand why a company that has been in talks with a cashed-up suitor for months was not able to at least offer Autodesk due diligence.
The Altium board’s negative response to what looks like a knockout offer is in sharp contrast to the warm reception for the $6.50-a-share takeover proposal for Hansen Technologies from private equity group BGH Capital.
BGH was smart to enlist the support of Hansen’s CEO, Andrew Hansen, who has agreed to work exclusively with it to seek to implement the proposal.