Marketing automation pioneer Keap has been acquired by Thryv Holdings for $80 million – a price below their annual revenue that’s raising eyebrows in the SaaS industry. This video breaks down the unexpected acquisition, explores what it means for current Keap users, and examines Thryv’s strategy of funding the purchase through a public stock offering, revealing potential concerns about the future of the platform and its pricing structure.
Here’s the cleaned up transcript for you to follow along:
Breaking News Announcement
[00:00:00] All right, everyone, big news at the time of recording this, this happened yesterday, and I just want to open up the lines of communication about it, especially the fact that it’s taking place in the marketing automation space, probably the biggest acquisition news for small business marketing automation software. I just recently recorded a podcast with the co-founder of Keap, which just got acquired by a company named Thryv. And in this podcast, we were discussing how instrumental and impactful they’ve been in creating this marketing automation space that has paved the way for all of these other platforms to really grow.
Initial Acquisition Details
[00:01:30] So when I first read this, I was surprised because it came at a time where I don’t think anybody was expecting it. In fact, I heard that the keep community was kind of up in arms. On October 29th Thryv holdings announced a strategic acquisition of Keap. This is expected to establish industry leadership with a total SAS revenue to exceed 400 million. The total transaction is a value of 80 million paid in cash. Keap generated approximately 85 million of revenue during the trailing 12 months through June 30th.
Analysis of the Sale Price
[00:03:00] They did not sell for at least one times their revenue, their reported revenues, which we often see SAS companies sale at a multiple multiplication factor or evaluated at least at a factor much higher than what they currently generate in revenue. To me, that’s my first sign that I think things were perhaps worse than what they appeared with Keap.
Historical Context and Market Position
[00:03:53] When I was at lead pages, there was a time where we were transitioning from some old technology that the company was built on to new technology to enable drag and drop building. At the time click funnels came in and they were like, forget having not being able to drag and drop, and lead pages really trailed slowly to make that adjustment and lost a ton of market share and never got it back. I think something similar is happening here with Keap.
Thryv’s Financial Structure
[00:06:00] Business wire posted this – Thryv announced today an underwritten public offering of 75 million shares of common stock. In connection with the proposed offering, Thryv intends to grant the underwriting a 30-day option to purchase an additional 15%. Thryv intends to use the net proceeds of this offering to fund the purchase price for the previously announced acquisition of Infusion software.
Thryv’s Current Performance
[00:08:06] The company exceeds third quarter SaaS revenue and SaaS adjusted EBITDA guidance. Their SaaS revenue is expected to be in the range of 86 million to 88 million, which means whatever they just paid for this, they’re gonna get it right back. They’re expected to raise their SAS gross margin to a range of 69 percent to 70 compared to 64.
Pricing and Future Concerns
[00:11:21] The essential bundle starts at 456 a month, that’s over 4,000 a year. Growth bundle, 610 a month, that’s over 6,000 a year. Ultimate bundle 761 a month, over 7,000 a year. These look like HubSpot and Salesforce numbers. If you are a keep user, go holler at keep your partner representatives. I have no inside information, but I will be worried that whatever I was paying, I’m probably not going to be paying the same.
Closing Thoughts
[00:15:00] This is not going to happen until Q4. You won’t see the implications of this probably until 2026, if that. It’s something to be mindful of, though. It’s technology. It’s where we’re at. This is just it.
