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

FOR IMMEDITE RELEASE: 8/16/2019

 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

Contact 

For additional information, please contact; 

Frank Stiff

Cheval Capital, Inc

+1-703-549-7390

fstiff - at - chevalcap.com

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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.

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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.

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Hillary Stiff's HostingCon 2017 Valuation Slides

Below is a link to Hillary Stiff's slides from HostingCon 2017 on current valuations in the hosting and cloud markets. Please feel free to send over any 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 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 or purchase of a business or making other financial decisions.

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.

Valuation of Public Hosting Companies - September 28, 2016

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 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 350 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are for sale.

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The WHIR - Derek Vaughan on "Web Hosting Still Growing"

Hillary Stiff has some comments in Derek Vaughan's recent WHIR column on Web Hosting & HostingCon 2011.  

Valuation of Public Hosting Companies - September 8, 2010

Summarized below is an estimate of the relative valuations of some public companies that have significant hosting operations.   Please be aware that a number of these companies have significant other businesses that may also affect the valuations.  (All data was taken from publicly available financial statements and please see this post for how we calculate Enterprise Value - "EntValue".) 

Closing prices as of 9/8/2010

 AnnualizedEntValueEntValue/EntValue/

CompanyRevs ($mil)    ($mil)   Revenues  EBITDA

North America   

Savvis $    887 $ 1,888    2.1    8.6

Rackspace $    749 $ 2,874    3.8  11.6

Navisite $    126 $    224    1.8    9.3

Web.Com $     99 $     99      1.0     6.6

Peer1 $    100 $    187    1.9    7.3

Group iWeb $     29 $     48    1.7    6.1

Europe    

United Internet $ 2,364 $ 4,092    1.7    8.9

Dada $    195 $    197    1.0    7.8 

Mamut $     76 $     95    1.2    5.7

Net Benefit Gp $     67 $    127    1.9    8.6

IOMart Gp $     31 $    112    3.6   16.0

Australia    

Melbourne IT $    180 $    202    1.1       7.8

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.

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.