Using an existing business to fund the turnaround
Savneet explains why PAR kept its government business while rebuilding software products, then redeployed the sale proceeds into an acquisition.
Summary ·Watch at 06:48
Founder conversationUnicorn $50m+
$200M Turnaround: Savneet Singh of PAR Technologies
Keeping the government business to fund a software rebuild, then using the sale proceeds for an acquisition
Savneet Singh · PAR Technology Corp.
Published September 6, 2024About this resource
- Format
- SaaSOpen 2024 NYC
- Length
- 20 min video
- Inside
- 9 key moments
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What you’ll learn
Savneet explains why PAR kept its government business while rebuilding software products, then redeployed the sale proceeds into an acquisition. Savneet discusses the economics of large enterprise contracts and the challenge of selling to different buyer personas through the same team.
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Find the ideas you need and go straight to the source.
Selling multiple products through one sales organization
Savneet discusses the economics of large enterprise contracts and the challenge of selling to different buyer personas through the same team.
Summary ·Watch at 10:20
Giving product leaders ownership of their P&L
Savneet describes PAR’s decentralized structure, where general managers own business results and decisions for their product lines.
Summary ·Watch at 12:14
Looking at recurring revenue per share
Savneet explains why he tracks recurring revenue relative to share count when assessing how growth and fundraising affect shareholder value.
Summary ·Watch at 17:07
Turnaround agenda
“Over the next 20 minutes… You’ll learn OPERATIONS $200m Turnaround story Vision/People Training next layer of management PRODUCT Where to expand 1st, 2nd, 3rd Product Buckets Ecosystem Map Open Commerce M&A STRATEGY Deal 1: Buying $40m ARR Deal 2: 12x EBITDA Next Deal”
Hardware-to-SaaS shift
“NYSE: PAR Revenue Growth Hardware to SaaS Product mix 2024”
TASK acquisition
“NYSE: PAR Revenue Growth Paid $206m for TASK ($40m ARR, $6m EBITDA) How did you get to the 5x ARR multiple, 34x EBITDA multiple? 2024”
Stuzo acquisition
“NYSE: PAR Revenue Growth Paid $170m Cash for Stuzo ($40m ARR, $14m EBITDA) How did negotiate the 12x EBITDA multiple (4.5x ARR) 2024”
Build, partner, or buy
“NYSE: PAR Revenue Growth Which boxes do you Build, Partner, Buy? Would you acquire in “Marketing Automation” bucket? 2024”
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$200M Turnaround: Savneet Singh of PAR Technologies - Slide Deck
Savneet Singh is an award-winning software / SaaS CEO with deep expertise across the retail, fintech and payments industries. Savneet is currently CEO of PAR Technology Corporation (NYSE:PAR), a provider of point of sale software to the retail industry. Under his tenure, the Company has transformed from a distressed provider of hardware to a fast-growing SaaS business. This work has included two significant capital raises, two large acquisitions and a dramatic change in workplace culture. Prior to PAR, Savneet has extensive experience as both an investor and Board Member, having served on a number of both public and private Boards, including a listed SPAC.
- Company revenue
- $123M
- Team size
- 1541
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Slide by slide
Each slide with a short explanation of what it shows. Open the slide text for its exact wording.
18 passages
PAR turnaround context
Slide text
SaaSOpen, September 2024 $200M Turnaround Story: 39 Year Old CEO Transforms NYSE: PAR into $400m SaaS Savneet Singh CEO of NYSE: PAR
PAR's stock rose, fell, and partly recovered
PAR's five-year share-price chart climbs to a peak in 2021, drops sharply into 2022 and 2023, then recovers part of the way through 2024.
Slide text
NYSE: PAR Revenue Growth
Revenue was flat for years, then took off
PAR's revenue stayed roughly flat for over a decade, then climbed steeply after Savneet became CEO. The bar chart runs from 2001 to 2023, with an arrow marking when he took over and the highest bar in 2023.
Slide text
NYSE: PAR Revenue Growth Savneet CEO
Operations, product, and M&A agenda
Agenda: operations, product, and M&A
The talk is organised into three parts. Operations covers the $200m turnaround, vision and people, and training the next layer of management. Product covers where to expand first, second and third, product buckets, and the Open Commerce ecosystem map. M&A covers two deals and the next one.
Slide text
Over the next 20 minutes… You’ll learn OPERATIONS $200m Turnaround story Vision/People Training next layer of management PRODUCT Where to expand 1st, 2nd, 3rd Product Buckets Ecosystem Map Open Commerce M&A STRATEGY Deal 1: Buying $40m ARR Deal 2: 12x EBITDA Next Deal
Valuation and market-recognition challenge
Revenue doubled but market cap is ~50% lower
Growth in revenue has not translated into a higher valuation. The slide states revenue is up 2x over the last 3 years while market cap is ~50% lower. A market-cap chart peaks at $2.07B in April 2021, then falls back and stays well below that.
Slide text
NYSE: PAR Revenue Growth Why isn’t the market giving PAR Credit? Revenue is up 2x last 3 years, while market cap is ~50% lower Valuations
Old PAR sold point-of-sale hardware
Before the turnaround, PAR was a hardware business. From 2001 to 2018 it was known for POS systems, shown here as a countertop terminal with a touchscreen order interface.
Slide text
NYSE: PAR Revenue Growth POS Systems Old PAR 2001-2018
An investor board member became interim CEO
The turnaround began with a leadership change in December 2018. A press release announces Savneet Singh, a board member since April 2018, as interim CEO and President after the prior CEO stepped down. His prior roles were at CoVenture and the PE firm Tera-Holdings.
Slide text
NYSE: PAR Revenue Growth Savneet Named Interim CEO Previously CoVenture and PE firm Tera-Holdings DEC 2018
Hardware-to-SaaS transformation
PAR now sells a bundle of software products
By 2024 PAR's mix had moved from hardware to SaaS. Its restaurant suite spans point of sale, restaurant operations, payments, loyalty, and digital ordering and delivery, with hardware now one category among several.
Slide text
NYSE: PAR Revenue Growth Hardware to SaaS Product mix 2024
TASK acquisition
Buying TASK: $206m for $40m ARR
PAR paid $206m for TASK, a company with $40m ARR and $6m EBITDA, which works out to a 5x ARR multiple and a 34x EBITDA multiple. The embedded investor slide shows 110+ customers, $40M+ ARR and 70 countries, with a logo wall of well-known restaurant brands.
Slide text
NYSE: PAR Revenue Growth Paid $206m for TASK ($40m ARR, $6m EBITDA) How did you get to the 5x ARR multiple, 34x EBITDA multiple? 2024
The TASK deal slide stays up
This build repeats the TASK acquisition slide unchanged, leaving the $206m price and the 5x ARR and 34x EBITDA multiples on screen.
Slide text
NYSE: PAR Revenue Growth Paid $206m for TASK ($40m ARR, $6m EBITDA) How did you get to the 5x ARR multiple, 34x EBITDA multiple? 2024
Stuzo acquisition and ecosystem strategy
Buying Stuzo: $170m cash at 12x EBITDA
The second deal was cheaper per dollar of profit. PAR paid $170m in cash for Stuzo, with $40m ARR and $14m EBITDA, a 12x EBITDA multiple or 4.5x ARR. The embedded slide pairs Stuzo with PAR's Punchh loyalty product and shows fuel and convenience retail brands.
Slide text
NYSE: PAR Revenue Growth Paid $170m Cash for Stuzo ($40m ARR, $14m EBITDA) How did negotiate the 12x EBITDA multiple (4.5x ARR) 2024
Ecosystem map guides build, partner, buy
PAR's Open Commerce platform sits at the center of a map of integrations: payments, loyalty, marketing automation, delivery, mobile wallets, connected cars, digital channels, and retail site systems. The question posed is which boxes to build, partner on, or buy, including whether to acquire in marketing automation.
Slide text
NYSE: PAR Revenue Growth Which boxes do you Build, Partner, Buy? Would you acquire in “Marketing Automation” bucket? 2024
ARR per share grew every year since 2018
The slide poses ARR per share as the private-company equivalent of a public growth measure, arguing every dollar of ARR sits on a stream of future cash flow. The chart rises every year from 0.7 in 2018 to 4.9 in 2023 and 6.2 in 2023 pro forma, with a stated 55%+ ARR per share CAGR from 2018 to 2023.
Slide text
NYSE: PAR Revenue Growth What is the ARR/Share equivalent for private companies? Under each dollar of ARR is meaningful cash flow 2024
Adjusted EBITDA losses narrowed over three periods
This reconciliation table backs up the profitability trend. Adjusted EBITDA improves from $(12,258) thousand in Q2'23 to $(10,201) thousand in Q1'24 and $(4,348) thousand in Q2'24, after adding back items like depreciation, stock compensation and transaction costs.
Slide text
NYSE: PAR Revenue Growth
Q2 2024: subscription up, hardware down
Subscription grew while hardware shrank. The slide highlights a 67% increase in gross margin and a $7.9 million increase in Adjusted EBITDA versus Q2 2023, plus a 57% increase in ARR and a 48% increase in subscription revenue.
Slide text
NYSE: PAR Revenue Growth
Back to the revenue chart without annotation
The build returns to the 2001 to 2023 revenue bar chart with the CEO arrow removed, leaving the long flat stretch followed by steep growth on screen.
Slide text
NYSE: PAR Revenue Growth
Turnaround takeaways
Recap: operations, product, and M&A lessons
The talk's three takeaways repeat the opening agenda, now framed as lessons from a CEO running a $400m ARR company. Operations covers the turnaround and management training, product covers expansion order and the ecosystem map, and M&A covers the two deals and the next one.
Slide text
In summary, you just learned … all from a $400m ARR CEO who is doing it as we speak! OPERATIONS PRODUCT M&A STRATEGY $200m Turnaround story Vision/People Training next layer of management Where to expand 1st, 2nd, 3rd Product Buckets Ecosystem Map Open Commerce Deal 1: Buying $40m ARR Deal 2: 12x EBITDA Next Deal
Thank you from Savneet Singh
Closing card from SaaSOpen, September 2024, thanking the audience. It shows Savneet Singh, CEO of NYSE: PAR, with the PAR logo and no further call to action.
Slide text
SaaSOpen, September 2024 Thank you! Savneet Singh CEO of NYSE: PAR