Mint Acquisition Brings Internet M&A Multiples Back To Lofty Levels

Intuit is buying personal-finance site for $170 million. This represents a fairly rich acquisition price relative to current financial performance:

  • If our projections of about $10 million in revenue this year are accurate, that would be a 17-times multiple of revenue.
  • With about 1.2 million unique visitors currently coming to the site every month, Intuit would be paying about $140 per user.

This suggests acquisition prices may be rising again after a tough year full of many distressed sales.  Go back a bit, and you’ll find plenty of precedent for this price in previous deals:

  • AOL bought Bebo in early 2008 for $35 per user (still way too much).
  • Microsoft bought aQuantive in 2007 for about 11 times revenue (ridiculous).
  • Yahoo! bought Zimbra in late 2007 for about 17 times revenue.

To be sure, Intuit is probably thinking it can use its scale to likely double Mint’s user-base.  It also will learn from the immense amount of data the company oversees as it integrates people’s financial accounts.  And it will take out an upstart competitor to Quicken Online.  In addition, using the pile of cash on Intuit’s balance sheet makes sense

We expect that the higher-profile names in the digital media space will likely start using some of their ample cash to make acquisitions. 

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