Valuing a Hybrid Revenue Business

Would really appreciate some help on this as I am struggling with a special project I got staffed on... How would one go around valuing a business that has a portion of its revenue stream from subscriptions to a product (bring in a monthly constant revenue per unit), and the rest from one time charges upon sale? It seems that for purely subscription-based businesses, such as B2B Saas, using a revenue multiple is preferred and captures the value better. Ideally, I would want to use a revenue multiple for the subscription chunk of the business, and use any other standard valuation method such as a DCF to value the other income stream. As if there were 2 separate businesses being valued. But here is where it gets tricky: the same exact assets generate both of the revenue streams. Let me give you an example:

The business is a call center and they sell product A (subscription for a fixed monthly bill) and product B (paid upfront). Both of these products are sold by the same telemarketers, neither one being prioritized.

Given the same assets generate the two revenue streams, how would I go around including the expenses in my valuation? Just slap a revenue multiple on the Product B (subscription) business and include all expenses on the P&L in a DCF for the Product A (one time sale) business? This is really confusing to me...

 

Given that allocation of costs will be arbitrary, just build a consolidated DCF/APV (multiples are bull shit anyways) with separate revenue drivers for the two business lines and cost drivers based on those. Given that you state that a revenue multiple is 'capturing the value better' I assume you have a high growth& low/negative margin business. In that case make a long explicit forecast till the business gets into a steady (RONIC) state.

 
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