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In advance of the new "M&A Hit List" element of our service, we have a post out later. "What& #39;s The Point Of M&A". Widely viewed as good for sellers, bankers & lawyers, and bad for buyers, we beg to differ. We& #39;ll be talking about $CRM a serial acquirer par excellence.
2/ $CRM, more so than most software companies, realized early that to keep its valuation multiples high even as it scaled, the key was to maintain >20-25% revenue growth.
3/ The company also realized that, by and large, the market differentiates little between acquired and organic growth.
4/ So $CRM has used acquisitions for many years to maintain high reported revenue growth, which keeps its stock price high (mostly - we& #39;ll explore later the buying opportunities that CRM& #39;s big M&A exploits can bring).
5/ And with valuable stock it can keep paying execs with a heavy bias toward stock-based comp. Leaving plenty of cashflow free to .... pay down debt used for acquisitions.
