Can anyone confirm the consideration that Bottomline paid for the commercial banking asset they purchased? I read somewhere that it was $20m, but cannot believe that would be correct based on the revenue they are getting. Intuit decreased their guidance for Financial Services segment revenue by $12m with $4m of that coming in Q3. That means $8m of lower revenue in Q4. I am assuming that is a good run rate and the $4m is due to a mid-quarter purchase in Q3. That would imply a $32m annualized business and a $20m purchase price results in an implied revenue multiple of .625x.
Intuit acquired Digital Insight, which is the current Financial Services segment, for $1.3b in 2007. I cannot find the exact revenue that Digital Insight had at that time, but it appears to be around $250m. That equates to a revenue multiple of 5.2x. That price seems way too expensive, especially considering the revenue growth since the acquisition. How can they sell a piece of business they acquired for 5x revenue at 1/10th the multiple?
I think Intuit has a good business model, but they need to find better uses for their cash than overpriced acquisitions.