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Morningstar acquisition of Pitchbook is validation of the power of strategic partnership.

On October 14, Morningstar announced the acquisition of PitchBook for a deal value of $225M (7.2x trailing PitchBook revenues).   Kudos to John Gabbert!  This is a great example of a partnership built exceptionally well over time per the chronology below:

2007 - Pitchbook founded

2009 - Morningstar makes $1.2M Series A investment

2012 - Morningstar´s upcoming CEO Kunal Kapoor joins PitchBook board (at that time he was President of Data Division).    

2016 (Jan) -  Morningstar makes $10M Series B investment

2016 (Oct) – Morningstar pays $180M for remaining 80% stake

PitchBook was able to fund its growth through the strategic partnership and then exit at a great multiple. PitchBook was able to operate with market guidance from Morningstar—but no exclusives—and then hit a growth rate which will be very accretive to Morningstar’s slowing revenue growth. So, this is the ultimate win-win for both organizations. Given the high trailing revenue multiple paid by Morningstar, PitchBook also kept its exit options open while going with the natural acquirer in the end.   

 

mark upson