Acquisition Analysis: Catapult buys Perch for expansion revenue
A no-brainer to resell across its existing customer base
In this week’s Acquisition Analysis, I take a look at Catapult’s acquisition of Perch, a strength training analytics startup.
Catapult is an experienced acquirer with 5 acquisitions over the years. So it’s no surprise that the deal stacks up.
The Perch acquisition represents what looks like a no-brainer revenue expansion opportunity with a relatively insignificant dilution cost.
I’ll give a brief background on the companies involved and share the terms of the deal itself. Then, I’ll look at how it’s going to improve the financial performance of the buyer and how the acquisition fits their strategy (or not).
Company Backgrounds
Catapult is a global leader in sports performance technology, providing a combination of hardware and software to professional and semi-professional teams across the world and across sporting codes. I’ve previously done a deep dive into Catapult here.
Catapult did US$116m in FY25, up 16.5% from $100m in FY24. EBITDA was $18m in FY25, up from $9m in FY24. The revenue is from subscriptions to their software and devices.
Perch provides strength training analytics software and devices to professional sports teams. Perch has a list of customers that includes St George (NRL), Miami Heat (NBA), and the Seattle Seahawks (NFL).
Perch was founded in 2016 and went through MIT’s delta v accelerator. Over 2021/2022, Perch raised just over US$8m from investors and grew the business to US$2.5m in Annual Recurring Revenue (ARR).
Catapult says Perch is doing slightly better than 31 on the Rule of 40. Given Perch’s headcount was 10+ people, this likely means revenue growth was somewhere between 31-40%.
The Deal
The deal is US$28m in Total Consideration. This implies a revenue multiple of 7.2 or 11.2 depending on whether you include the performance component or not. The Total Consideration is broken down into Upfront Cash, Upfront Equity, Tranched Shares and Performance-based Shares.
Let’s look at each component.
The Upfront Cash is US$3m.
The Upfront Equity is US$6m, with half locked up for 6-months and the other half locked up for 12 months.
Tranched Shares of US$9m will be issued to Perch shareholders in 2 tranches, with US$4.5m being issued after 6 months (in December 2025) and another US$4.5m tranche after 12 months in June 2026.
Performance-based Shares of up to US$10m in shares tied to achieving ACV (Annual Contract Value) growth objectives between June 2027 and May 2028.
Strategic & Financial Impact
Catapult’s revenue and profitability will barely be impacted, initially, by this transaction. $2.5m in revenue is only 2% of Catapult’s total revenue of $116m. Although it will make their revenue growth look better, contributing to ~17% of revenue growth in the coming year if Catapult continues its current organic growth rate.
The real opportunity is the expansion revenue opportunity. If Catapult can sell Perch to its existing customers, then there is a much higher revenue growth opportunity.
Selling Perch to existing Catapult customers is likely a straightforward proposition because of Perch’s “couple of hundred clients”, mostly in American football, almost all of whom are Catapult clients. It’s just a case of selling Perch to Catapult’s customers in other sports codes.
Final Thoughts
Venture Investor Returns: Perch received US$8m in venture capital which often, but not always, carries terms that see the investors paid back first. So, there is a good chance that the $9m upfront in cash and equity goes straight to the investors or $8m to the investors with the left spread amongst the founders. Given the numbers so closely align, there is a good chance that the transaction was designed with this payback in mind to make it easier to get approval from Perch’s backers.
Small acquisition price with high upside: At today’s US$1bn market cap for Catapult, Perch’s $28m mostly equity purchase price is less than 3%. This is a small price to pay for something that appears certain to have a strong impact on revenue growth.