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.