Thread regarding SAS Institute layoffs

Not sure why employees, former employees, or customers would be interested in any acquisition. Would likely be harmful to employees and customers (faster layoffs, raised prices, etc.).

“No known offers in nearly 4 years”

Why would you know?

You are assuming he has even tried to sell it

Best way to sell SAS is to sell it piece by piece instead of bundled. No known offers in nearly 4 years suggests that the bundled price is too high - or the bundle is not desired due to too much unwanted baggage.

More buyers wants pieces instead of the whole. Selling one car at a time is faster and easier and ultimately yields more money than selling an entire fleet as a bundle.

@ea+1jwf1pvnn I’d almost rather see an acquisition just to get valuation number by savvy financial folks whether that be private equity or another tech company. Show me such some/any acquisition in the past 15 years for large successful albeit flat and better days behind them company that was at a 2.6x valuation.

IPO would be nice but I trust those valuations FAR less as they tend to be all over the place and contorted by factors (good and bad) totally unrelated to the company itself.

@dz+1jwf1pvnn
If SAS ever IPOs we'll know what the market values the company at, and I think that's what's holding the IPO up. Most of the pronouncements from the company's leadership lately have created the appearance (some might say illusion) of value, in particular the extension of the company's technology into the present. But SAS is not an AI company, and this will be yet another "too little, too late". Don't get me wrong... Integration with existing LLMs is a great idea, but delivering those LLMs is not SAS's core competency, and once a competitor with an R&D budget that eclipses SAS TOR decides to integrate their BI tools with their AI / LLM, anything SAS will have produced will look like "AI as an afterthought", which is what it is. Someone with that kind of computing power doesn't need a version 1 or version 2 or even version N that's computationally efficient. SAS's existence as an independent entity is owed more to largesse on the part of Microsoft or Google, but that era is probably coming to an end. Maybe OpenAI will buy the company for the same reason new money buys houses in the Hamptons. Who knows?

“ $8B is a reasonable price for $3B ARR, to "milk until it dies". Put all the software in maintenance mode, outsource most of that maintenance, and the buyer can easily profit.”

I disagree that a 2.6x is a reasonable price for a tech company with stable 3 billion revenue stream.

2. 6x is a bargain basement price for that.

Informatica was a 5x multiple. VMWare was 61(?) billion for ~12 billion in revenue at the time. 5x multiple.

Those were both for legacy software companies with dim futures and very slow growth BUT stable revenue streams.

$8B is a high price for $1.6 ARR, unless the acquisition is strategic -- as SalesForce says it is.

$8B is a reasonable price for $3B ARR, to "milk until it dies". Put all the software in maintenance mode, outsource most of that maintenance, and the buyer can easily profit.

I guess SAS could get $8B in a private sale, but not much more. Hence the decision to IPO.

“ Some will conclude that Salesforce saw more potential in them than us. Some will conclude that maybe Salesforce passed us by because our asking price is way too high for the perceived value of SAS”

Honest non trolling question. You have a distinct style in your comments that some would be curious about.

Why do you say “some will conclude” instead of that you conclude?
Some will indeed conclude those things. Some will not conclude those things. We can only speak for ourselves.

They didn’t get acquired. Until they did.

There just aren’t a lot of suitors for that amount of money.

They got acquired. We didn't. Some will conclude that Salesforce saw more potential in them than us. Some will conclude that maybe Salesforce passed us by because our asking price is way too high for the perceived value of SAS. Maybe some of both and maybe other reasons.

I look at Forbes to get yearly sales figures. https://www.forbes.com/companies/sas/

Informatica had 1.6 billion in 2024 revenue.

Pretty small increases over the past several years. Not flat but not high growth either.

SAS would likely be valued between 9 and 15 billion for the steady revenue stream alone assuming worst case of no growth potential.

sounds way worse

And yet if you read their thelayoff it reads just like this one.