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GoDaddy IPO - Pricing & Valuation

Congratulations to the folks at GoDaddy who priced their IPO last night above the range at $20/share.  It should begin trading sometime later this morning. 

Assuming no exercise of the underwriter's overallotment option and taking into account the 26mm+ issued but unexercised employee stock options , $20/share works out to a traditional Enterprise Value of approximately 19x EBITDA (LQA), ~ $4.3bn.  (Please see this post for how we calculate Enterprise Value). 

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

GoDaddy IPO - Expected Price Range & Valuation

GoDaddy amended its S1 last night to include an expected price range for its IPO of $17-$19 per share.  At the mid-point of this range, the equity value comes in just above $2.7bn and, on a fully diluted basis, in excess of $3.2bn. The traditional Enterprise Value calculation comes it at more than 16x EBITDA, approximately 17.5x EBITDA if you include the dilutive effects of employee stock options (please see this post for how we calculate Enterprise Value).  We'll provide more details when the offering gets priced and begins trading.

 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 270 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are

Valuation of Public Hosting Companies - March 17, 2015

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 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.

* - The financial data for most of the above companies is based on their press releases and is as of 12/31/2014. We will update the valuations when the companies make their SEC filings and more of the European hosters have released results.

 

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 270 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are

Valuation of Public Hosting Companies - February 25, 2015

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 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.

* - The financial data for most of the above companies is based on their press releases and is as of 12/31/2014. We will update the valuations when the companies make their SEC filings and more of the European hosters have released results.

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 270 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are

The M&A Process With David Snead

One of the most common questions we are asked is about the various steps involved in the buying or selling of a web hosting business.  Recently, Frank sat down with Internet industry attorney David Snead (dsnead.com) and talked through the process.

We hope this has been of interest and are happy to discuss any of these topics at your convenience.

Hillary Stiff & Frank Stiff

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.

Authors: Hillary Stiff & Frank Stiff of Cheval Capital have been investment bankers  completing M&A transactions, arranging financing and providing financial advice for a large number of companies including The Endurance International Group, SingleHop, Rackspace, Web.Com among many others. They have completed over 270 successful web hosting, ISP and related transactions and distribute a list of hosting and related companies that are for sale.

Valuation of HostEurope acquisition of Intergenia

Congratulations to the folks at HostEurope and Intergenia on their recently announced transaction. 

Information released by Oakley Capital indicates a transaction value of E 210MM and a run rate EBITDA of more than E 20MM putting the purchase multiple in the 10x or less range on run rate EBITDA.  Given the amount of overlap between the two companies, we expect that, post integration, the contribution margin to be very high making this a highly EBITDA accretive transaction for HostEurope further pushing down their effective acquisition multiple.

Oakley reported a 36% IRR on their Intergenia investment.

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 270 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 - November 17, 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.)

 * - The financial data for most of the above companies is as of 9/30/2014. United Internet and Melbourne are as of 6/30/14. Iomart is as of 3/31/2014.

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 270 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.

Related articles

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.

Valuation of HostEurope Offers To Buy Iomart

Last week Iomart PLC (IOM.L) announced that it has rejected two purchase offers from Host Europe Holdings Ltd. 

The offers were at 275 pence and 285 pence or about 14x trailing EBITDA. For context, here is our most recent set of valuation estimates for other publicly traded hosters.

UK law gives HostEurope until August 21 to increase its offer or walk away.

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.

Valuation of Public Hosting Companies - June 10, 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.)

* - Melbourne IT's large cash balance may distort the Enterprise Value calculation.

** - GoDaddy's recent S1 filing does not include valuation information.

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.

Hillary Stiff Speaking at HostingCon 2014

Hillary will be speaking at HostingCon 2014 in Miami.  

Her panel, "Understanding Valuation - How the Big Guys Do It", is on Monday, June 16th at 2:15pm.

Also on the panel is Greg Wong, SVP of Corporate Development for Web.com, Jeff King, General Manager of Hosting, Commerce and Security at Go Daddy and Eric Cooney, President and CEO of Internap.

Valuation of Public Hosting Companies - March 19, 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.)

Note - Melbourne IT's large cash balance may distort its valuation ratios.

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.