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Cheval M&A, Inc. & Cheval Capital, Inc. complete 500th Hosting, Cloud & Internet Services Transaction


 Cheval M&A and Cheval Capital complete 500th Hosting, Cloud & Internet Services Transaction

 Washington, DC – Boutique investment banking firms and Internet services specialists, Cheval M&A, Inc. and Cheval Capital, Inc. announced today that they have advised on their 500th successful transaction in the cloud, hosting, IAAS and related Internet services spaces.

Cheval achieved this milestone as a part of six transactions that have closed over the past few weeks and marks the 25th transaction they've successfully closed so far in 2019! These transactions have been completed with a wide variety of companies in the U.S., Canada, Europe, Middle East, and South America.

Extensive industry expertise helps maximize client value from the unique aspects of their business, regardless of location. Smaller clients realize particular benefit from demand created by the Cheval Opportunities List.

Hillary Stiff of Cheval M&A commented on the event, “We’ve been very fortunate since we began in this industry in the late 1990s to have worked with a large number of great companies of all types and sizes, including some of the top names in the industry.  We had the pleasure in this case to close a mix of transactions, ranging from hoster/cloud providers to large IPv4 blocks, to push us over 500.”

To learn more about Cheval M&A, Inc. and Cheval Capital, please visit: www.chevalacq.com and www.chevalcap.com

About Cheval M&A, Inc. and Cheval Capital, Inc.

Cheval M&A, Inc. and Cheval Capital, Inc. are boutique Investment banks specializing in mergers, acquisitions and corporate finance. They have expertise in a variety of industries but have been particularly active in the Internet services arena since the mid 1990’s.

Cheval Capital, Inc. is a FINRA (www.finra.org) registered broker-dealer


For additional information, please contact; 

Frank Stiff

Cheval Capital, Inc


fstiff - at - chevalcap.com


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.

Frank Stiff appointed Director and 2019 Board Chair-Elect of the i2Coalition

Washington D.C., August 2nd, 2018 -  The i2Coalition (Internet Infrastructure Coalition) announced that Frank Stiff, President, and Co-Founder of Cheval Capital, has been appointed to its Board of Directors, and named Chair Elect. Mr. Stiff’s position as Chair Elect became effective on immediately. He will assume his role as Board Chair on January 1st, 2019 and hold the office throughout the year. Until that time, Mr. Stiff will work with current Board Chair Michele Neylon. Mr. Stiff’s full term on the Board of Directors will last until 2021.

Frank is an investment banker with particular expertise in Cloud, hosting and related Internet services businesses. He has spent the last twenty years providing advice and helping many companies in these sectors complete transactions. A regular speaker at industry conferences, Frank was an early member of the i2Coalition and has been active on the Policy Working Group and lobbying fly-ins.

Christian Dawson, i2Coalition Co-Founder, and Executive Director said, "We are a member-led organization, that believes in the importance of small business Internet innovation. I’m extra proud that we are turning to one of our most active members to take on the role of Chair Elect. Frank runs a business designed to help small businesses and is a small business owner himself. His insights have been, and will be, invaluable" 

“Frank has been actively engaged in the internet industry for eons. He knows all the players and has been very active and vocal as an advocate for the industry for many years. I’m confident that he will be a strong and rational voice for our industry,” added i2Coalition Board Chair and Blacknight CEO Michele Neylon. 

Frank commented, “It has been a great pleasure to work with the i2Coalition over the past seven years and I look forward to helping the organization continue its valuable work on behalf of the many companies that build and run the nuts and bolts of the Internet.”

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About i2Coalition

The i2Coalition (Internet Infrastructure Coalition) ensures that those who build the infrastructure of the Internet have a voice in global public policy. Founded in 2012, the i2Coalition is the leading voice for web hosting companies, data centers, registrars and registries, cloud infrastructure providers, managed services providers, and related tech. The i2Coalition protects the innovation and continued growth of the Internet’s infrastructure, essential to the global economy.

For more information, please contact:

Dakota Graves,
Communications Manager, i2Coalition
718 7th Street NW, 2nd Floor,
Washington DC 20001
Office: (202) 621 0773

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.


Here is our conference schedule for the next few months.

  • World Hosting Days – March 27-30, 2017. Rust, Germany
  • HostingCon – April 3-6, 2017. Los Angeles, California
    • Hosting Feud with Drinks Game Show on April 3rd at 5pm.
    • Hillary Stiff is speaking on the current climate and trends in M&A on April 5th.
  • Pressnomics – April 7, 2017. Tempe, Arizona

Please let us know if you will be attending any of these as we'd enjoy meeting up!

Cheval Year End Letter - 2016

Happy New Year

We want to thank our clients and colleagues for a record breaking 2016.  M&A activity in cloud, hosting and related business segments was at high levels during 2016 and we were fortunate to complete 24 M&A and 35 IPv4 block transactions.  The M&A transactions included a broad mix of sizes and types of hosting businesses and we have now completed over 370 internet services and related transactions since we first got started in the space in the mid-1990s.  

As we have done for the last few years at this time, we’d like to take a moment to highlight a few of the industry trends that caught our eye during 2016:

Industry growth in dollar terms continues to accelerate - *: The Hosting and Cloud business had another solid year in 2016. While the industry’s growth rate declined to an estimated 18.8% rate in 2016 from 20.2% in 2015, the industry’s growth in total dollars accelerated from an estimated $12.1B increase in 2015 to an estimated $13.5B increase in 2016. We believe the continued increases in dollar growth to be a more significant predictor of industry health than percentage growth at this time, particularly in the current stable/declining price environment. These increases highlight the continued expansion of demand for cloud, hosting and related services. 451 Group’s projections indicate growth in dollar terms is likely to continue to accelerate over the next few years.

As in previous years, growth across the industry continues to be uneven. This year we’ve worked with hosters growing at 30+% per year and hosters that are shrinking. We expect this unevenness to continue.

(* - 451 Research, Market Monitor 2016.)

Divergence of brains & brawn: We’ve seen increasing numbers of service providers offering service on others’ infrastructure. While not uncommon in the past, we’re now seeing it on a larger scale and among providers of higher end and more specialized services. Our expectation is that as the hyper-scalers continue to reduce prices and expand service, we will see more of these infrastructure-lite providers. We believe this separation is due in part to a declining rate of return on commodity infrastructure and in part from new opportunities the hyperscalers are creating (e.g. support, onboarding, management.)

We also believe that for the smaller providers, selling brains is likely to generate a higher risk adjusted return than commodity computing infrastructure. A key problem however, is that valuation and sale of businesses that sell hours of service like a consulting firm can be more difficult. Companies following this path need to ensure they automate and productize their service.

AWS Lightsail: Amazon Web Services (“AWS”) released a new VPS hosting product in late 2016. While the Lightsail product is not revolutionary or particularly aggressively priced, it does signal AWS’s desire to go after the unmanaged VPS market more seriously. If AWS remains true to form, we can expect price cuts, better hardware and an expanded product/service portfolio down the road. Given their size advantages, they are likely to be a formidable competitor to existing SMB hosters.

Ongoing M&A Trends: Lastly, a number of the M&A trends we highlighted last year appear to be continuing. Rather than repeat ourselves, you may find our 2015 letter https://www.chevalcap.com/blog/2016/1/11/hosting-ma-update of interest.


Best wishes for a happy and healthy 2017!

Hillary Stiff & Frank Stiff
Cheval Capital, Inc.

HostingCon 2016 Events

We will be in New Orleans at #HostingCon2016 this month (July 24-27th.) HostingCon is a conference and trade show for the web hosting and cloud community and we're looking forward to seeing everyone once again this year! Some of our events include;

Sunday at 5pm is the HostingCon Game Show. Aaron Phillips of #cPanel is hosting a trivia contest and Family Feud game. The winning team gets dinner at Shaya, the James Beard Award winning best restaurant for 2016!

On Monday at 10am, join us for the panel, "How Service Providers Can Raise Money for Business Growth". The focus will be on financing tools available to small to mid-sized companies including options such as SBA financing and leasing.

Tuesday at 9am will be an Acquisition panel with some of the big buyers in the industry focusing on how they evaluate companies and things sellers can do to help their valuations.

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

Hillary & Frank



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.

Cheval Capital Advises Melbourne IT Group on the sale of their International Domain Name Business to Tucows

Congratulations to the folks at Melbourne IT on the sale of their international domain business to Tucows.  Cheval advised Melbourne IT in the sale. 

Melbourne IT Group is a publicly listed company based in Australia. Their Small and Medium Business Division is Australia’s largest domains and hosting business, providing service to SMB’s under the Melbourne IT, WebCentral, Netregistry, and TPP brands.  Melbourne IT’s Enterprise Services Business Division is Australia’s leading software and cloud enabled and services business, operating under the Melbourne IT, Outware Systems and InfoReady brands. 

Frank Stiff, President of Cheval Capital commented on the event, “We were pleased to have been able to assist Melbourne IT with this transaction. Melbourne IT’s international domain name business, with its 250 global resellers across the USA, Europe and Asia, is a unique asset and was an excellent opportunity for Tucows to acquire a loyal, profitable base of resellers that has the same core needs as their existing wholesale customers.”





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

Congratulations to the i2C

Congratulations to the folks at the Internet Infrastructure Coalition (of which we are a member) for the success of their 2015 Fly-in on Capitol Hill. (News, pictures and tweets here.)

The Internet Infrastructure Coalition supports and represents those who build and operate the nuts and bolts of the Internet. Founded in 2012 by a diverse group of Internet infrastructure companies, the coalition seeks to give the industry a voice within our Government and other public policy forums.

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.    

2015 HostingCon M&A Panel; Hillary Stiff; Ditlev Bredahl; Liam Eagle; Ted Chang; Cheval Capital

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.

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.

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