Hosting M&A Market Overview
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Transcript of Hosting M&A Market Overview
Hosting M&A Market Overview
August 8th, 2011Updated
Hillary Stiff, Managing DirectorCheval Capital, Inc.
• Buyers tend to be existing players looking for simplicity and revenue
• Quality gets a premium• Migration deals get priced on buyer cash flow after migration – Shared Avg: 0.8-1.2x, higher on quality of ops, growth & size– Dedicated Avg: 0.7-0.8x, harder to migrate, lower ROI
• Non-migration get priced on existing cash flow and can have a large range (2-10x EBITDA)
Cheval M&A Market Overview
• Lots of buyers for shared and VPS in all sizes• Solid demand for medium to large dedicated customer bases
at good ARPU. Smaller bases and lower ARPU’s can be difficult.
• Strong demand for medium to larger data centers but smaller facilities can be difficult
• Pockets of demand for domain and registrars• Buyers driven by cost & difficulty of organic growth
M&A Market - Buyers
• Seller pool has increased from recent lows but still fewer sellers than buyers
• Prices aren’t high enough to drive owners to sell • Strong buyer to seller ratio has helped keep prices up• Exceptions: adult hosters, low ARPU hosters and hosters with
higher churn rates. All appear to have more sellers than buyers
M&A Market - Sellers