Cheval Capital Year End Letter 2014

We want to thank you all for a great 2014 and wish you the best for a healthy, happy and prosperous 2015.  Here at Cheval we completed 25 hosting and related transactions in 2014 pushing our total to over 275 Internet services transactions since we first got started in the space in the late 1990s.

As the year comes to a close, we thought it might be helpful to provide a summary of the things that got our attention in the ~$50bn/year Hosting, Cloud, and Infrastructure-as-a-Service businesses (collectively “Hosting”) in 2014.

AWS competitors gain traction

Amazon’s biggest Cloud competitors (Microsoft, IBM, Google) made significant progress in 2014 and appear to have gotten onto a path of sustained growth. While comparing these companies to Amazon Web Services is very much an apples-to-oranges comparison (in terms of both size and products) the emergence of these companies’ Cloud offerings into solidly growing businesses has created more choices for users and increased the overall level of industry competition. It is also interesting that these companies have separated themselves from the rest of the industry in terms of scale and capabilities.

Continue reading "Cheval Capital Year End Letter 2014" »


Panel: What Do You Know Now That You Wish You Knew Before Your First Acquisition?

Cheval sponsored a panel at HostingCon 2014 titled "Understanding Valuation – How the big guys do it."  We’ve transcribed/edited HostingCon’s recording of the panel into a series of posts. The first one was on What Hosting Buyers Want and will be putting up over others in the future. Here is the second one.

Panelists: 

     Eric Cooney, President & CEO of Internap Network Services

     Jeff King, GM of Hosting, Commerce and Security at GoDaddy

     Greg Wong, SVP Corporate Development of Web.com

     Hillary Stiff, Managing Director of Cheval Capital

 

Question:  What do you know now that you wish you knew before your first acquisition? 

Continue reading "Panel: What Do You Know Now That You Wish You Knew Before Your First Acquisition?" »


Hillary Stiff Speaking At HostingCon Europe

Hillary Stiff will be speaking at HostingCon Europe in Amsterdam on October 15.  The panel will look at Hosting Metrics and how they can help a hoster run their business, raise capital or get a better valuation when it comes time to sell.  The panel will also look at how a hoster can go about tracking the numbers necessary for such metrics.

Other panelists include Tenko Nikolov, CEO of Siteground and Erik Logtenberg, CEO of Vevida Services bv.

Please let us know if you will be attending as we'd be happy to get together.


Panel: What Do Hosting Buyers Want?

Cheval sponsored a panel at HostingCon 2014 titled "Understanding Valuation – How the big guys do it."  We’ve transcribed/edited HostingCon’s recording of the panel into a series of posts that we will be putting up over the next few months. Here is the first one.

Panelists: 

     Eric Cooney, President & CEO of Internap Network Services

     Jeff King, GM of Hosting, Commerce and Security at GoDaddy

     Greg Wong, SVP Corporate Development of Web.com

     Hillary Stiff, Managing Director of Cheval Capital

 

Question:  What does it take for you to seriously consider a transaction?

Continue reading "Panel: What Do Hosting Buyers Want?" »


Valuation of Public Hosting Companies - February 21, 2014

 

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 statements and please see this post for how we calculate Enterprise Value.)

As of 2/21/2014        
  Annualized EntValue Enterprise Value /
Company Revs ($mil) ($mil) Revenues EBITDA
Wix  $         81  $     1,374 16.9 Neg.
Internap  $       296  $        778 2.6 12.4
Web.Com Group  $       525  $     2,798 5.3 17.5
Endurance Int'l  $       532  $     2,874 5.4 14.3
Rackspace  $     1,632  $     4,797 2.9 9.1

 

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.