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Valuation

How To Buy An Online Business With An SBA Loan - The Requirements

How To Buy An Online Business With An SBA Loan - The Requirements

We'd like to thank Mark Daoust, owner of Quiet Light Brokerage, for giving us permission to reprint his blog post on SBA loans, part 1 of which is below.  Mark is the go-to-guy for the purchase or sale of online eCommerce businesses and if you have an interest in that space, we encourage you to contact him at inquiries@quietlightbrokerage.com.

The US Government's Small Business Administration lends up to $5 million that businesses that meet certain criteria. The post below talks about the general requriements of an SBA loan while part 2 will get into the process of applying for an SBA loan.

 

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.

VALUATION OF PUBLIC HOSTING COMPANIES - March 22, 2017

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 The Endurance International Group and Web.Com among many others. She has helped complete over 370 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are for sale.

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United Internet Acquires Strato from Deutsche Telekom

Continuing the trend of telecom companies divesting hosting and co-location assets, Deutsche Telekom announced last week that it would sell its Strato hosting arm to United Internet for E600mm, approximately 12.4x 2016 EBITDA. For those keeping score, Deutsche Telekom acquired Strato in 2009 for E275MM giving it a compound annual return of about 11.8% (ignoring  intervening cash flows.)

Two other key points; approximately E34mm of the purchase price is subject to the business hitting certain performance targets which may take a little of the price risk out of the deal. Second, United Internet is reporting an expected E20mm p.a. of synergies from integrating the two businesses. Those additional synergies bring the incremental EBITDA margin for United to approximately 54%.

Overall pricing is in the same ballpark as GoDaddy's recent purchase of Host Europe Group.

United Internet's presentation on the purchase can be found here.

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.

GoDaddy Acquires Host Europe Group

Congratulations to the folks at GoDaddy and Host Europe on their announced transaction.

The purchase price of $1.82 billion (including debt assumption) works out to approximately 13x 2016 EBITDA.  This compares to GoDaddy's estimated public market value of 15-20x EBITDA before the announcement.

Both companies have great management teams and this seems to be a transaction where there is an excellent chance that 2 + 2 > 4.

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.

VALUATION OF PUBLIC HOSTING COMPANIES - JULY 15, 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 320 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 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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Valuation of HostEurope's Third Offer for Iomart

It looks like the third time was the charm as Iomart, after rejecting HostEurope's first two offers, has entered into acquisition discussions based on HostEurope's third offer of 300 pence per share. In an earlier post we looked at the valuation of HostEurope's first two offers.  The current offer of 300 pence, by our figures, puts the Enterprise Value of Iomart at approximately GBP 350mm, approximately 15x 2014 fiscal EBITDA.  (Note that Iomart's fiscal year ended March 31, 2014 which likely makes the 15x EBITDA multiple higher than if it were based on current EBITDA.)

Please feel free to contact us with any questions. 

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

DISCLAIMER: This summary is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell companies or a comprehensive discussion of the risks involved in buying or selling a company. Please be sure to consult your legal and financial advisors when considering the purchase or sale of a business or completing other financial transactions. Cheval Capital assumes no responsibility or liability for any of the information contained herein.