RE:RE:VHI Hung In Tough In 2021
What VHI is looking for in future acquisitions (taken from VHI's October 2021 online Investor Presentation):
Have identified 400 companies primarily in Canada, the UK, and Australia that are looking for exits.
Looking for target companies that possess the following revenue characteristics:
1) Annual revenues of between 1M and12M.
2) Purchase them for a price between a 1.0x and 2.5x revenue multiple.
What VHI looks for in target companies:
- Recurring revenue above 60% of total revenue.
- Breakeven or profitable.
- Owner operated businesses with limited outside investment.
- Large component of expense is on Research & Development vs. Sales & Marketing.
- Little commercialization or sales and marketing expertise.
- Significant customer base with minimal retention issues.
- Limited or no expansion beyond geographical boundaries, creating a large growth barrier
- Ability to upsell to existing install bases of target companies by bringing their product into a mobile environment.
I also suspect VHI would consider swallowing a bigger company if the price and fit were right.