Cheval Capital, Inc.

Valuation of Public Hosting Companies - Februrary 19, 2010

Summarized below is an estimate of the relative valuations of some public companies that have significant hosting operations (as of Februrary 19, 2010.)   Please be aware that a number of these companies have significant other businesses that may also affect their valuations.

	Annualized	EntValue	EntValue
Company	Revs ($mil)	($mil)	Revenues
North America
Savvis	$  879	$ 1,488	1.7x
Rackspace	$  678	$ 2,817	4.2x
Navisite	$  147	$   273	1.9x
Web.Com Group	$  105	$   125	1.2x
Peer1	$   96	$   147	1.5x
Group iWeb	$   27	$    46	1.7x
Europe
United Internet	$ 2,071	$ 4,833	2.3x
Dada	$   206	$   197	1.0x
Mamut	$    77	$   127	1.7x
Net Benefit Gp	$    69	$   135	2.0x
IOMart Gp	$    26	$    71	2.7x
Australia
Melbourne IT	$     188	$   197	1.0x

As always, please feel free to contact us if you have any comments, or questions.

Cheval Capital, Inc.

Notes:

Enterprise Value ("EntValue") formulas: Please see this post for how we calculate Enterprise Value.

Multiple of Revenue:  A multiple of revenue is not a great way to compare companies.  However, the companies above all have very different capital and operating structures.  As such for the puroposes here, we have found it to be the most straigthforward method of comparison.

Source of the data: All data was taken from publicly available financial statements.  

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.

WHIR Webinar Q & A

We participated in a recent webinar sponsored by The Whir on "Selling Your Hosting Company" where a number of questions did not get answered due to time constraints.  We have taken a shot at answering these questions below.  Please don't hesitate to drop us a note (fstiff [at] chevalcap [dot] com) if you have any questions or comments.

The webinar can be played back here.

Cheval Capital, Inc.

Deutche Telekom purchases Strato Hosting

The WHIR reports that Deutche Telekom is buying European hoster Strato for EUR275 million.  This works out to just over $400 million and, based on published information, approximately 3.1x revenue and 8.6x EBITDA. (These multiples are based on published reports of Strato's results for the first 9 months of 2009 annualized.) 

Please keep in mind that we do not know if there was any debt assumed by DT or if there were any other assets included as a part of the deal. Either of which would distort the multiples from what is shown above.

Disclaimer: This post is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell any 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.

Valuation of Public Hosting Companies - July 21, 2009

Summarized below is an estimate of the relative valuations of some of the public companies that have significant hosting operations as of July 21, 2009.   (Please be aware that a number of these companies have significant other businesses that may also affect their valuations.)

	Annualized
Company	Revs ($mil)		EntValue/Revs
North America
Savvis	$     886		1.4x
Rackspace	$     580		3.1x
Navisite	$     149		1.2x
Web.Com Group	$     111		1.4x
Peer1	$      91		1.5x
Group iWeb	$      25		1.7x
Europe
United Internet	$  2,403		1.7x
Dada	$     218		1.0x
Mamut	$      83		1.4x
Net Benefit Gp	$      64		1.7x
IOMart Gp	$      19		2.7x
Australia
Melbourne IT	$     151		1.3x

As always, please feel free to contact us if you have any comments, or questions.

Cheval Capital, Inc.

Notes:

Enterprise Value formulas: Please see this post for how we calculate Enterprise Value.

Multiple of Revenue:  The reason that we use a multiple of revenue to compare these companies is that they all have very different capital and operating structures and compete in different parts of the hosting business.  While not a great way to compare companies, we believe that for high level comparisons it is the most straightforward.

Source of the data: All data was taken from publicly available financial statements.  

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.

Valuation of Public Hosting Companies - March 9, 2009

Summarized below is an estimate of the relative valuations of some of the major hosting companies as of March 9, 2009.   

                     Annualized    Enterprise  
  Company           Revs ($ mil)   Value/Revs 

  United Internet  $   2,058         1.1 x 
  Savvis           $     890         1.0 x
  Rackspace        $     573         1.6 x
  Dada             $     226         0.7 x
  Navisite         $     151         0.9 x
  Web.Com          $     116         0.5 x
  Peer 1           $      95         1.0 x
  Group iWeb       $      15         1.8 x

As always, please feel free to contact us if you have any comments, or questions.

Cheval Capital, Inc.

 

Notes: 

Enterprise Value formulas: Please see this post for how we calculate Enterprise Value.

Multiple of Revenue:  The reason that we use a multiple of revenue to compare these companies is that they all have very different capital and operating structures and compete in different parts of the hosting business.  While not a great way to compare companies, we believe that for high level comparisons it is the most straightforward.

Source of the data: All data was taken from public financial statements for the periods ended September 30, 2008 or December 31, 2008.  

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.