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Cheval Capital HostingCon 2017 Valuation Slides

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Hillary Stiff's slides from HostingCon 2017 on current valuations in the hosting and cloud markets.

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Cheval Capital HostingCon 2017 Valuation Slides

  1. 1. Download the App and rate this session. app.hostingcon.com Hosting M&A Los Angeles Convention Center April 5, 2017
  2. 2. THE GLOBAL EVENT FOR THE CLOUD AND SERVICE PROVIDER ECOSYSTEM Public Company Valuations * - Growth rates affected by acquisitions Takeaways • Public companies trading within historic ranges of 8x & 12x EBITDA • Strong organic growth gets higher multiples Annualized EntValue Enterprise Value / Seq Qtrly Rev GrowthCompany Revs ($mil) ($mil) Revenues EBITDA Wix $ 337 $ 2,805 8.3 39.2 11.3% GoDaddy $ 1,944 $ 7,176 3.7 25.2 2.9% IOMart Group $ 105 $ 428 4.1 9.7 10.4% Endurance Int'l $ 1,168 $ 3,116 2.7 9.0 0.3% Internap $ 296 $ 564 1.9 6.5 0.2% Dada $ 64 $ 114 1.8 12.0 0.0% United Internet $ 4,386 $ 10,346 2.4 10.5 3.6% * Web.Com Group $ 749 $ 1,636 2.2 8.6 39.4% * Melbourne IT $ 129 $ 183 1.4 8.5 12.1% *
  3. 3. THE GLOBAL EVENT FOR THE CLOUD AND SERVICE PROVIDER ECOSYSTEM Growth vs. Valuation Source: Byron Deeter, Bessemer Venture Parters, 2016
  4. 4. THE GLOBAL EVENT FOR THE CLOUD AND SERVICE PROVIDER ECOSYSTEM Private Market & Transactions Private Market Rules of Thumb - Consolidating Shared & VPS acquisitions ~1.0x Revenues - Consolidating Dedicated acquisitions ~0.8x Revenues - Non-consolidating/Platform acquisitions > Smaller EBITDA ~2-4x EBITDA > Larger EBITDA ~5-8x (+) EBITDA > “Must Haves” ++ - Organic growth can increase/decrease multiples Significant transactions - Rackspace buyout $4.3B ~7x EBITDA - Windstream acquisition of EarthLink $1.1B ~5.3x EBITDA - GoDaddy’s acquisition of HostEurope Group $1.7B ~12.1x EBITDA - United Internet acquisition of Strato € 600M ~12.4x EBITDA
  5. 5. Download the App and rate this session. app.hostingcon.com Hosting M&A Los Angeles Convention Center April 5, 2017

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