The i2Coalition has posted their monthly update of regulatory events for January 2024. Their legislative outlook and summary of key events regarding Section 230/Intermediary Liability among other issues make this monthly summary worth the read. Join i2 to get the more detailed briefing!
The September I2Coalition Legislative Update
The folks at the i2Coalition have posted their monthly update of regulatory events for September 2022. Key events regarding Section 230/Intermediary Liability make it worth the read (among other issues.) Join i2 to get the more detailed briefing!
i2Coalition's Ten Year Anniversary!
Congratulations to the folks at the i2Coalition who have been defending Internet Infrastructure providers on Capitol Hill for 10 years! They have doe a lot of great work and I highly recommend their monthly legislative briefs.
i2Coalition Panel: Privacy & Privacy Shield
The i2Coalition recently hosted a panel on Capitol Hill regarding the critical and impending issues of Privacy legislation in the US and the EU-US Privacy Shield. This was the third of three panels i2Coalition co-hosted with the European eco Association and included senior staffers from Congress, key i2Coalition members, Board Chair of the eco Association, and moderated by our own Frank Stiff, President of Cheval Capital and Board Chair of the i2Coalition. Watch the full video and learn more on the i2Coalition's website.
Key takeaway: Congress is moving toward enacting Privacy legislation that would have far reaching implications for US business, international trade and existing privacy laws such as California’s new privacy law (CCPA) and GDPR. See panel video 29:30 – 36:00 for an overview of what is driving the legislation and where things stand today.
Key takeaway: The EU-US Privacy Shield is a consensual, long-term data protection regime and is a requirement for any business model in which personal data is stored and processed across borders. Without Privacy Shield, it would be illegal to transfer personal data from the EU to the US, crippling Internet services trade between EU and the US. See 10:00 for an overview of Key Privacy Shield Issues Today.
Key takeaway: See 20:00 for two views on why privacy laws are different between the US & EU.
Key takeaway: See 44:30 for the lessons learned from GDPR after a year.
Cheval Capital
Disclaimer: This post is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell the stocks mentioned above, a comprehensive discussion of valuation or how to do the calculations discussed. Please be sure to consult your financial advisors when valuing your company, considering the sale of your business or making other financial decisions.
Author: Hillary Stiff is Managing Director of Cheval Capital. She has been an investment banker and CFO, completing M&A transactions and arranging financing for a number of companies including The Endurance International Group and Web.Com among many others. She has helped complete over 450 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are for sale.
VALUATION OF PUBLIC HOSTING COMPANIES - NOVEMBER 26, 2018
Summarized below are estimates of the relative valuations of some public companies that have significant hosting operations. Please be aware that a number of these companies have other businesses that also affect their valuations. (All data was taken from publicly available financial information and please see this post for how we calculate Enterprise Value.) If you wish to get a sense for changes to valuations over time, here is a link to some of our past valuation summaries.
As has been the case for some time, companies with higher organic growth rates have higher valuation multiples.
As always, please feel free to contact us if you have any comments, or questions.
Cheval Capital, Inc.
Disclaimer: This post is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell the stocks mentioned above, a comprehensive discussion of valuation or how to do the calculations discussed. Please be sure to consult your financial advisors when valuing your company, considering the sale of your business or making other financial decisions.
Author: Hillary Stiff is Managing Director of Cheval Capital. She has been an investment banker and CFO, completing M&A transactions and arranging financing for a number of companies including The Endurance International Group and Web.Com among many others. She has helped complete over 450 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are for sale.
VALUATION OF PUBLIC HOSTING COMPANIES - MARCH 9, 2018
Summarized below are estimates of the relative valuations of some public companies that have significant hosting operations. Please be aware that a number of these companies have other businesses that also affect their valuations. (All data was taken from publicly available financial information and please see this post for how we calculate Enterprise Value.) If you wish to get a sense for changes to valuations over time, here is a link to some of our past valuation summaries. (We'll add United Internet when it releases Q4 2017 financial information on March 22.)
As always, please feel free to contact us if you have any comments, or questions.
Cheval Capital, Inc.
Disclaimer: This post is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell the stocks mentioned above, a comprehensive discussion of valuation or how to do the calculations discussed. Please be sure to consult your financial advisors when valuing your company, considering the sale of your business or making other financial decisions.
Author: Hillary Stiff is Managing Director of Cheval Capital. She has been an investment banker and CFO, completing M&A transactions and arranging financing for a number of companies including The Endurance International Group and Web.Com among many others. She has helped complete over 450 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are for sale.
Cheval Capital Celebrates Our 400th Transaction!
We're excited to announce that Cheval Capital recently celebrated our 400th transaction! Since we first entered the space in the late 1990's Hillary & Frank have helped businesses in cloud, hosting, and IAAS industries navigate the tricky waters of mergers and acquisitions, financings and corporate finance.
The 400-transaction benchmark also marks the 25th transaction we've successfully closed so far in 2017! Over the last few months we've completed transactions with companies in Ireland, Australia, New Zealand, China, Israel, Canada as well as the US.
Our extensive industry expertise & network have enabled us to help our clients get maximum value from the unique aspects of their business regardless of location.
Here's what Hillary Stiff had to say about passing the 400 mark, “Over the last few years our business has grown as providers have struggled with organic growth and have turned to acquisitions instead. This acquisition demand has supported prices and led to an active transaction market."
Click on the links above to get more information about Cheval or feel free to contact us with any questions you have. We're always happy to help.
Expanding your business through M&A
We recently gave a presentation on M&A at a customer conference for a large Hosting Industry vendor. The slides turned out to be pretty complete so we're reposting!
Please feel free to contact us if you have any questions or comments.
Cheval Capital
Disclaimer: This post is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell the stocks mentioned above, a comprehensive discussion of valuation or how to do the calculations discussed. Please be sure to consult your financial advisors when valuing your company, considering the sale of your business or making other financial decisions.
Washington & Encryption
David Snead, co-founder of the Internet Infrastructure Coalition (i2C), and I went to Capitol Hill this past week to lobby on Encryption issues.
The good news was that the Feinstein - Burr legislation was generally thought to be ill-conceived and not going to pass in its current form. Given the strength of the comments we heard, I got the sense that they had been getting a lot of negative comments on the legislation from different parts of the debate. Unfortunately, the discussions did indicate there was still room for consideration of similarly troublesome legislation in the future. If you are not up on Feinstein - Burr I recommend this Tech Crunch article.
I think most also recognized that breaking encryption in some manner was not really an option and they wanted to try and find other options to help law enforcement deal with encryption.
In the interesting news camp, there were a number of comments about developing rules to allow the law enforcement, under a valid court order, to hack (or hire hackers to hack) encrypted data.
The concerning news was that despite making comments about how they recognized that breaking encryption was a bad idea, several commented on the need for both sides to compromise. How we compromise without breaking encryption is a mystery and a concern that they don't quite get it.
A final note regarding the i2C. These lobbying trips are one of the great perks of being an i2C member and I encourage folks to join the organization and its fight to minimize disruption from ill-conceived government actions. The current fight on encryption is a hugely important one and I encourage everyone to join in.
Year End Hosting M&A Update
We want to thank all of our clients and colleagues for a great 2015. We were fortunate to complete a record 40 transactions in 2015. These transactions included a broad mix of sizes & types of businesses and a number resulted from the vibrant IPv4 transaction market (now that the registries have exhausted their IPv4 supply.) We are now up to 316 hosting and related Internet services transactions since we first got started in the space in the mid 1990's. Our M&A experience in 2015 does not appear to have been unique. M&A activity in the hosting and co-location segments was at high levels during 2015 with the number of transactions and transaction values exceeding 2014 levels (including co-location.)
During the year a number of trends caught our attention that we thought might be of interest.
Vibrancy of the Industry
The Hosting Industry had another great year in 2015. Despite its very large size (~$70+bn), the industry grew at an estimated 20% rate from 2014 to 2015. The highest percentage growth rate was in the Platform as a Service sector (~29%), with the largest dollar growth rate in the industry's largest sector, Managed Hosting. This segment posted an estimated growth of $5.6bn or a 47% share of new industry revenues added. Growth however, was not evenly shared across companies and it is does appear clear that overall growth is decelerating.
The drivers of growth continue to be well understood. These include;
- Increasing complexity is driving companies to outsource existing services and expand their need for new services;
- The economies of scale that service providers can achieve make their offerings attractive in value terms; an
- Companies like the convenience of a single vendor.
Major Industry Trends Remain Intact
Last year we highlighted some trends that had recently emerged and represented a departure from past experience. These trends continued into 2015. Notably;
(1) The large, non-Amazon, cloud providers continued to gain workloads and revenue at high rates. The business models for these newer providers have gained traction and while it appears that Amazon will continue to dominate the space for the foreseeable future, these newer providers are increasingly competitive. Our expectation is that the continued growth of Amazon, Microsoft, IBM and Google will have an increasing impact on the economics of hosters in all segments.
(2) The rationale for M&A transactions has expanded sharply from consolidations to a much broader mix including products/markets/capabilities; and
(3) Historically commodity oriented providers have been adding features and services to create differentiation and move out of the commodity area.
All these trends continued, if not strengthened in 2015, and we see no reason why they won't continue for some time. There were also several additional factors that caught our attention during the year;
(4) The mid-sized providers, those larger than $10-$15MM of EBITDA, have been getting bought out over the last few years and we are headed for a bar-belled like space with mostly large and small providers but few mid-sized ones. While we don't expect all of the providers in this range to get bought out, and some new companies will grow into the range, we do expect this trend to continue. For companies in this range, that means a very attractive supply/demand environment when the decision is made to exit.
(5) We have been seeing more highly specialized companies emerging. These companies seem focused on providing a single, highly specialized service. The recently emerged Dispel.io and their Security as a Service being just one example. The expanded M&A rationales (#2 above) appear to be feeding supply/demand for these types of companies.
We hope this has been of interest and if you have any questions please contact us.
Best wishes for a healthy and productive 2016
Hillary Stiff & Frank Stiff
Cheval Capital, Inc.
January 11, 2016
SingleHop's 6th Year on the Inc 5000
Congratulations to our friends at SingleHop for their 6th consecutive year on the Inc 5000.
Hillary Stiff Speaking At HostingCon Global
Hillary Stiff will be speaking at HostingCon Global in San Diego on July 27. Her panel will look at the changes in Hosting M&A in 2014 and 2015 and the trends that have been building to cause these changes. Panelists include Ditlev Bredahl of OnApp, Liam Eagle of 451 Group, & Ted Chang of GoDaddy.
Please let us know if you will be attending as we'd be happy to get together.
Author: Hillary Stiff is Managing Director of Cheval Capital. She has been an investment banker and CFO, completing M&A transactions and arranging financing for a number of companies including NTT/Verio, The Endurance International Group and Web.Com among many others. She has helped complete over 280 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are for sale.
GoDaddy IPO - Pricing & Valuation
Congratulations to the folks at GoDaddy who priced their IPO last night above the range at $20/share. It should begin trading sometime later this morning.
Assuming no exercise of the underwriter's overallotment option and taking into account the 26mm+ issued but unexercised employee stock options , $20/share works out to a traditional Enterprise Value of approximately 19x EBITDA (LQA), ~ $4.3bn. (Please see this post for how we calculate Enterprise Value).
Here is a link to some of our past valuation summaries.
As always, please feel free to contact us if you have any comments, or questions.
Cheval Capital, Inc.
Disclaimer: This post is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell the stocks mentioned above, a comprehensive discussion of valuation or how to do the calculations discussed. Please be sure to consult your financial advisors when valuing your company, considering the sale of your business or making other financial decisions.
Author: Hillary Stiff is Managing Director of Cheval Capital. She has been an investment banker and CFO, completing M&A transactions and arranging financing for a number of companies including NTT/Verio, The Endurance International Group and Web.Com among many others. She has helped complete over 270 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are for sale.
GoDaddy IPO - Expected Price Range & Valuation
GoDaddy amended its S1 last night to include an expected price range for its IPO of $17-$19 per share. At the mid-point of this range, the equity value comes in just above $2.7bn and, on a fully diluted basis, in excess of $3.2bn. The traditional Enterprise Value calculation comes it at more than 16x EBITDA, approximately 17.5x EBITDA if you include the dilutive effects of employee stock options (please see this post for how we calculate Enterprise Value). We'll provide more details when the offering gets priced and begins trading.
Here is a link to some of our past valuation summaries.
As always, please feel free to contact us if you have any comments, or questions.
Cheval Capital, Inc.
Disclaimer: This post is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell the stocks mentioned above, a comprehensive discussion of valuation or how to do the calculations discussed. Please be sure to consult your financial advisors when valuing your company, considering the sale of your business or making other financial decisions.
Author: Hillary Stiff is Managing Director of Cheval Capital. She has been an investment banker and CFO, completing M&A transactions and arranging financing for a number of companies including NTT/Verio, The Endurance International Group and Web.Com among many others. She has helped complete over 270 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are
Valuation of Public Hosting Companies - March 17, 2015
Summarized below are estimates of the relative valuations of some public companies that have significant hosting operations. Please be aware that a number of these companies have other businesses that may also affect their valuations. (All data was taken from publicly available financial information and please see this post for how we calculate Enterprise Value.) If you wish to get a sense for changes to valuations over time, here is a link to some of our past valuation summaries.
* - The financial data for most of the above companies is based on their press releases and is as of 12/31/2014. We will update the valuations when the companies make their SEC filings and more of the European hosters have released results.
As always, please feel free to contact us if you have any comments, or questions.
Cheval Capital, Inc.
Disclaimer: This post is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell the stocks mentioned above, a comprehensive discussion of valuation or how to do the calculations discussed. Please be sure to consult your financial advisors when valuing your company, considering the sale of your business or making other financial decisions.
Author: Hillary Stiff is Managing Director of Cheval Capital. She has been an investment banker and CFO, completing M&A transactions and arranging financing for a number of companies including NTT/Verio, The Endurance International Group and Web.Com among many others. She has helped complete over 270 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are