Business Start Date: 9/1/20
Business Location: London, UK
Business Valuation: $930,000 USD (Price lowered from $1,050,000 USD)
Business Model: Subscription-based Enterprise SaaS
Industry: Pharmaceutics, Tracking & Analytics
Percentage Being Sold: 100%
Sales (TTM): €206,350.00 (~$235,000)
Net Profit (TTM SDE): €200,750.00 (~$230,000)
Business Multiple (TTM Revenue): 3.95x
Business Multiple (TTM EBITDA): 4.06x
YoY Profit Growth Rate: 6.13%
Paying Clients (TTM): 20+ Enterprise Companies
Tag Line: 4+ Y/O Enterprise SaaS Platform for EU Pharma Market

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Summary 

This company was started in late 2020 to monitor Italian e-retails in the pharmaceutical sector. Since then it has acquired major clients such as Bayer, L'Oréal, Aboca, Haleon, and has expanded its tracking to other European countries.The company is sold turnkey as a fully automated very profitable SaaS entity that can be run successfully by 1 person.

The Opportunity 

The founder is an entrepreneur. The business was born almost by chance, to learn modern programming techniques, without real business objectives. The founder had no experience or knowledge in the pharmaceutical industry, yet in a short time he created a market-leading product and managed to acquire important customers. The success of the product, which is welcome, has gone far beyond the founder's expectations.

Last year one of the customers, Aboca, surveyed all its European branches, comparing the products available in each market; This company came first in all countries. This company has thus expanded its monitoring to cover five European countries. However, it has not started commercial activities in new markets: there is therefore unexpressed potential.

The founder enjoys strong economic well-being and intends to dedicate himself to other projects. He's more than satisfied and has no incentive to further expand the business. Therefore it is reasonable to let someone more motivated exploit the company's untapped potential.

There are currently four directions for the possible growth of the business:

1) Sales in markets already under monitoring: France, Germany, Spain and Poland. This task can be immediately started.

2) Expansion in other markets, which can easily be accomplished with little effort.

3) Sales of a lower-end product, already created, to attract smaller companies.

4) Expansion into other sectors, for example the technology or the cosmetics sector, which requires some implementation efforts.

This company offers a market-validated and fully automated platform of excellent quality, which has already passed the run-in phase. Last year's revenues were over $300,000; this turnover was achieved by a single person working part-time, with a commercial partner. The technological system is ready; an adequate commercial effort can easily multiply the turnover.

General Highlights

• 4+ year old Italian SaaS company monitoring the online pharmaceutical pricing market at the European level.

• Bootstrapped to 20 enterprise customers and growing - only requires 1 person working part time to run the business!

• Revenues are over $300K with almost $240k in profit with very little expenses

• All processes are fully automatized and operational needs are minimal 

• Technology infrastructure, well-reputed brand and leading customers are sold turn-key with the business

Niche

This company offers its customers a very precise and detailed view of the dynamics of their pharmaceutical products on online markets.

Customers use this company to track product prices, assortment, reviews, visibility, images, out-of-stock, and monitor competitor products and their marketing activities. This company aggregates data from dozens of e-commerce sites, including Amazon, eBay, Google Shopping, and various price search engines that bring data from thousands of points of sale in a simple and intuitive interface.

Online commerce is constantly growing and consequently the need to control its daily dynamics is growing. Firms need to adapt a pricing strategy that considers competitors as well as the distribution channels AND this platform allows them to do that in a very easy and intuitive way.

Customer Base

The main customer base is made by big/medium European pharmaceutical companies, like Aboca, Alfasigma, Bayer, Bioderma, Bionike, BiosLine, Istituto Ganassini, Guna, Haleon, L'Oréal, Somatoline, Unifarco.

The business has approximately 20 customers. The base price of our service is 12,000 Euro/year.

We have a 3rd party partner who brings us leads, in exchange for a percentage of the turnover that decreases over time.

The cost of acquiring a new customer is quite low: in an hour we set up a demo environment which we open to the customer for one or two weeks. With one or two calls we explain the product and provide training. The after-sales service is almost non-existent because the product interface is very intuitive.

Loyalty is high, usually at least 80% of customers remain.

Traffic

The company operates “lazy” and doesn't perform online marketing activities and doesn’t track their online traffic currently. 

Revenue Sources

The product price is 12,000 Euro/year for up to 5 brands with up to 5 competitors for each brand.

Some companies need more brands, so we charge some more. There are situations where we give a discount. 

Financials

The owner does not influence the earnings power; all the revenues can be transferred to a new owner.

The owner doesn't have a salary but collects dividends. When calculating profit the founder's work is not counted among the costs. Also, the owner uses his laptop and phone.

Sales (USD)

2020 - 9,600 USD (9,000 EUR)

2021 - 57,500 USD (53,500 EUR)

2022 - 191,000 USD (177,700 EUR)

2023 - 307,400 USD (285,900 EUR)

2024 - 347,000 USD  (210,500 EUR)

Profit/SDE (USD)

2020 - 8,800 USD

2021 - 39,500 USD

2022 - 134,400 USD

2023 - 239,600 USD

2024 - 220,300 USD

2023 - 239,600 USD

NOTE: When calculating profit the founder's work is not counted among the costs.

Operations

Customers use a pleasant and user-friendly web interface to access data; few customers receive a daily Excel report via email with the most recent data.

The work is done remotely, without the need for an office; a computer and a phone are enough. 

The production process is 99% automated; the daily work is extremely limited.

Daily routine:

1) Check the advertisements (5 minutes/day)

2) Process the newsletters (10 minutes/day)

Occasionally, there is the need to monitor a new retailer or to adapt in case of site restyling. Usually 1 to 4 hours, once/twice a month.

Administration is easy. Billing is typically semi-annual or annual. We use an external accounting service. Usually, 2/3 hours per month are enough for administrative activities.

Team

As the production process is nearly fully automated, the actual work requires approximately two hours per day, for all operations: daily routine, administration, maintenance, acquisition of new customers, and management of existing ones.

All the tasks are performed by the owner.

The business can be run remotely. The founder often vacationed in various locations, including Egypt, running the business without difficulty.

Sales/Marketing

A commercial partner brings leads to the company. 

Usually, we set up a demo (1 hour or less) and we arrange a call (1 hour) with the potential customer. Then, in case of success, usually we have another call for training (30 minutes).

Partners

We only have a commercial partner who helps bring leads to the company. Customers pay us with a normal bank transfer.

Main Expenses

The largest expense regards our commercial partner. In 2023 it was 47,200 EUR -  $50,700. A new owner can manage this cost as he prefers.

$12,200 have been invested in a developer who helped build the platform. This is no longer a cost.

Then there are server and technology costs, which are approximately 2,500$/year. 

Administrative costs are approximately 2,500$/year as well. These two costs can hardly be reduced.

Work and Skills Required

The owner is responsible for ensuring that the technology infrastructure works. This implies good technical skills in managing servers and applications: the main software components are Ubuntu, Node.js, Meteor.js, MongoDB, and Javascript. Servers run on DigitalOcean; Google and AWS platforms are used for backups and data storage. 

All software components are open source, free to use, or self-produced. No user license is required.

The owner is also responsible for the administration of the company and customer support, which is minimal because the product is very simple to use.

Since the work is largely automated, the current time commitment is on average 2 hours per day.

The fundamental responsibility to organize concerns the maintenance of the technological infrastructure. Other tasks are trivial.

Who is the ideal buyer for this business?

The ideal buyer can take a variety of forms - they can be a large consultancy firm, as the data collected can also be used for analysis and consultancy. They could be a small fund and take some efforts that can easily scale the business. They could be in ecommerce and could use the customer base and platform to expand their business into pharmaceuticals or apply this company’s pricing analysis tool outside of the pharma industry. 

What (if any) post-sale support is included with the sale?

The main transition period activity is linked to technology transfer. The system is very large and performs many tasks. It shouldn’t be difficult to complete this though

The owner will be available for 20 hours per week for 8 weeks; this should be enough for the main part of the transfer - so that the new owner will have full confidence to run the business. Thereafter the owner will be available up to 20 hours per week as needed, according to the buyer's needs and wishes.

If the buyer wishes, the owner will also be available subsequently to provide advice or support for strategic decisions for future developments of the company.

Valuation

The business is priced at less than 4.14x of its TTM profit/SDE which is very competitive considering that the average SaaS company is selling for 5x of their ARR. 

Social Media The business’s marketing is “lazy”. No social media and no email lists outside of customers. 

Expansion Opportunities for New Owner

There are currently four directions for the possible growth of the business:

1) Sales in markets already under monitoring: France; Germany, Spain, and Poland.  This task can be started immediately. The costs of technological infrastructures are very low; the only necessary investments concern commercial activities.

2) Expansion into other countries, which is easily achievable with little effort: also in this case the costs of technological infrastructure are very low.

3) Sales of a low-end, already-made product to attract smaller companies. Also in this case the investments concern only the commercial activity.

4) Expansion into other industries, such as technology or cosmetics, which requires some implementation efforts. The technological infrastructure is reusable, but other sectors will have their specificities and for each of them there will be a learning curve.

The only cost that can be reduced is that of our business partner. The founder is very cost-conscious: it will be very difficult to try to reduce technological or administrative costs.

The price of the product is considered reasonable by customers, but the current product is aimed at large companies.

This company has already created, but has not yet started marketing, a product for smaller companies, to be offered at a lower price, which in our opinion is half the price of the flagship product.

Barriers to Entry

This company’s competitive advantage is excellence as they differentiate by having an excellent product. To compete with an excellent product a potential competitor must make another excellent product, which is not easy.

Still, some potential customers are forced by the parent company to use other tools. Generally, these customers are disappointed not to be able to use our platform, which they consider more advanced than the internal one.

Reason for Sale

The project was born almost by chance, with other purposes. However, the resulting product is excellent and has great potential. The founder lacks the motivation and desire to explore this potential and wants to pursue other activities.

It therefore makes sense to let someone more motivated exploit the company's untapped potential.

Miscellaneous Details

    1. The business doesn't require any license to operate.

    2. It will be an asset sale, not a stock sale.

    3. The business has never been sued or threatened with a lawsuit.       

    4. The business doesn't have any trademarks and is not at risk of infringing on any trademarks.

    5. A payment in Bitcoin will be highly appreciated by the founder and will be a reason for preference.

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All Assets Included with the Sale 

The sale will include:

    1. All Domains and all IP brand assets

    2. Website and all website contents

    3. All Proprietary Saas Software and the technical infrastructure

    4. All Customer information & active contracts

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About the Agent 

FIH.com is a Manhattan-based M&A advisory firm specializing in the sale of remotely-run successful digital companies (around the world) from $1M-100M in revenue, including apps, marketplaces, freemium + enterprise SaaS, ecommerce, affiliate/advertising groups, and more! We are proud to work with the very best entrepreneurs and investors, so if that’s you and you are in the market to acquire or sell a relevant business, then we encourage you to reach out for a complimentary consultation.