Spire Digital — Acquisition by Kin + Carta
Denver-based digital transformation and software engineering business acquired by Kin + Carta, illustrating how strong historical growth, an established team and specialist engineering capabilities can support the upper end of software development agency valuations.
Acquirer
Kin + Carta
Year
2019
Enterprise Value
~$14.8m (initial)
Revenue
~$9.4m
Adjusted EBITDA
~$1.3m (adjusted operating profit)
EBITDA Multiple
~8×
Industry
Software Development Agency
Transaction
Kin + Carta acquired Spire Digital in November 2019. Initial cash consideration was approximately $14.8 million, plus performance-based earnouts. The first earnout was structured using 8× Spire's EBITDA for the 12 months ending December 2019, less the initial consideration. A second earnout was based on 7× incremental EBITDA for the following year. Spire generated approximately $9.4 million in revenue and $1.3 million in adjusted operating profit in 2018, employed more than 100 people, and had achieved revenue growth of more than 20% annually between January 2015 and October 2019.
Why the Premium?
- More than 20% annual revenue growth between 2015 and 2019
- Established team of over 100 people
- Specialist custom software development and engineering capabilities
- Digital transformation and product strategy services
- Earnout structure aligning seller and buyer incentives
SME Takeaway
Spire Digital's revenue fell within the SME Multiples $1–$50M benchmark. The transaction illustrates how strong historical growth, an established team and specialist software engineering capabilities can support multiples at the upper end of the software development agency range, with earnout structures commonly used to bridge valuation expectations.
Disclaimer: Case study figures are based on publicly available information and are provided for illustrative purposes only. Transaction values, EBITDA figures and implied multiples may reflect different reporting periods, definitions and deal structures, and some multiples are calculated from disclosed figures rather than reported by the parties. They are not formal valuations, investment advice or a substitute for independent professional advice.