RE:RE:RE:RE:they bought Oceean/CognisantMD for $10.57MM + $7MM Earn Outjdsd0517 wrote: Again, I don't know the details of this company, but I know about Constellation and Enghouse; they don't pay 10X EBITDA for anything. Enghouse in particular is questioned on calls because they can't find enough companies to buy at their target multiples.
I have no opinion on Descartes.
As a rule of thumb, 5X current EBITDA is a good deal. The reason I made my comment is that the OP talked about 5X *FUTURE* EBITDA being a good deal. It isn't, unless the future is the day after the acquisition, not some time down the road.
Deals are usually done based on the forward ebitda, even if not explicitely mentioned when talking about the acquisition. As to 5x, it depends on the business, its size and the sector. Sale transactions in general were done well above 5x EBITDA, which is why Enghouse hasn't done any acquisition in a while (valuations too high for what they want to pay).