The Silent Premium: Why U.S. Buyers Pay 14 % More for Canadian SaaS EBITDA
Jacob Riddoch
1/12/25
U.S. buyers are quietly bidding 11.3× EBITDA for Canadian SaaS assets—14 % more than home-market offers—and most founders never spot the spread until it’s gone. Drawing on 47 cross-border deals we tracked since early 2024, this post unpacks why the premium exists, how fast it evaporates, and the moves that let sellers bank it instead of gifting it to the buyer.
The Silent Premium in Numbers
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Every founder knows multiples are a moving target, but few appreciate how much geography alone can widen—or shrink—the bullseye. To test the thesis, we audited every SaaS transaction Blitzrise Capital advised on, sourced, or tracked between January 2022 and March 2025. The sample spans 47 exits worth a combined CAD $7.3 billion.
Buyer Origin | Median EV/EBITDA Multiple | Sample Deals |
|---|---|---|
U.S. Strategic / Sponsor | 11.3× | HR‑cloud, vertical fintech, product‑led DevOps |
Canadian Strategic / Sponsor | 9.9× | Martech, prop‑tech, vertical ERP |
ROW (Europe/Asia) | 9.5× | Cyber‑sec, ed‑tech |
Premium delta: 14 %. That’s before layering earn‑outs or seller notes. Even a modest 4× EBITDA company leaves $5.6 million on the table if it never taps the cross‑border bid.
Why is the spread “silent”? Because league‑table press releases lump Canada into “International” and average away the signal. And proprietary PE data rooms are gated. Unless you live in the flow daily—as we do—you won’t see the gap until an advisor spells it out.
Take‑away: If your buyer universe stops at the 401 corridor, you’re pricing off the wrong baseline.
Three Forces Driving the 14 % Lift
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1. USD Firepower Meets CAD Cost Base
The loonie has traded between $0.72–$0.78 USD for most of the past two years. For a U.S. acquirer, every Canadian salary, Azure seat, and office lease converts at a 20‑30 % discount versus home‑market costs. That arbitrage lets them underwrite richer headline multiples while still meeting return thresholds—especially if the Fed loosens and the dollar stays buoyant.
2. Public‑Market Multiple Gap
U.S. cloud darlings continue to fetch forward EV/EBITDA north of 30×, while their TSX counterparts hover in the low‑20s. When an acquirer’s own stock is the acquisition currency, that gap converts into “free” price elasticity. Simply put, a buyer paying in 30× paper can happily cut a 12× cash cheque and book immediate accretion.
3. Roll‑Up Synergies Nobody Quantifies—Except the Buyer
Cross‑border buyers quietly run detailed synergy models on:
Sales‑and‑marketing consolidation (duplicate HubSpot/Marketo stacks, partner channels).
Back‑office harmonisation (IFRS to U.S. GAAP, SOX controls, SEC‑ready audit trail).
Product roadmap integration (shared micro‑service libraries, unified DevOps).
Our review of bidder models shows 200–400 bps margin expansion within 12 months—yet almost no Canadian sell‑side deck tries to capitalise on that. The acquirer captures the upside unless you surface it and price it in.
Reality Check: We watched a Victoria‑based vertical‑ERP vendor’s multiple slide from an indicative 12.2× to a closed 10.7× when a two‑month accounting restatement blew the deal clock past 120 days—just long enough for FX to swing against them and a U.S. comparable to miss earnings.
The forces are powerful but fragile: delay, data‑room clutter, or a bad hedge can vaporise them overnight.
Securing the Premium Before It Evaporates
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Step 1. Build a Buyer‑Stack, Not a Buyer List
We maintain a living heat‑map of 32 U.S. platforms and 18 PE funds that have executed north‑of‑the‑border SaaS deals since 2023. We score them weekly on cheque size, TAM adjacency, acquisition cadence, and integration velocity. Before your teaser hits InMail, half these strategics already know why your product fits their roadmap.
Step 2. Pre‑convert Financials to U.S. GAAP
Accounting debates kill momentum. We run a 30‑day “clean‑room” to rebuild revenue recognition, R&D capitalisation, and deferred contract costs under U.S. rules before data‑room Day 1. The goal: no re‑trades, no delays.
Step 3. Nail the FX Window
We lock hedges the morning the LOI hits DocuSign, combining forwards and collars that protect more than 90 % of enterprise value without draining cash. One Vancouver client gained an extra CAD $2.1 million on close—purely from timing the hedge.
Step 4. Quantify Synergy—Then Charge for It
Our playbook builds buyer‑specific synergy models, assigns probability‑weighted value, and then negotiates to capture 30–50 % of that upside in price or performance earn‑out. Acquirers respect sellers who can do the math.