Endurance International Group - Estimated IPO Valuation

Endurance updated its SEC filings last week to include an estimated offering range for their upcoming IPO.  At the midpoint of this range ($15/share) and their estimated Q3 EBITDA ($47-$48 million), the valuation of Endurance would be approximately 14.4x annualized EBITDA. 

Please treat this as a very preliminary estimate as there are a number of assumptions in this calculation that can have a meaningful impact on the final valuation. (In particular, the valuation does not include exercise of the underwriters 15% overallotment option, the Directi acquisition or the impact of outstanding Employee options.)  As we get more information we will update our estimates.

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.

Endurance International Group - Acquisition Valuations

    A few weeks ago, the Endurance International Group released an S-1 filing for a planned IPO of its Common Stock.  The S-1 has a lot of great information on Endurance, its operations and the many acquisitions it has completed.  I'd like to highlight two of their acquisitions here.

        The first was the purchase of Endurance itself on December 22, 2011 (referred to in the S1 as the Sponsor Acquisition.)  An investor group purchased Endurance by paying approximately $683 million in cash, securities and other consideration, and assuming liabilites of approximately $459 million resulting in a total value of approximately $1.14 billion.  Based on calendar 2011 results, this works out to roughly 6.0x revenue and 12.2x EBITDA.   (One note of caution: Using trailing twelve-month revenues/EBITDA may produce higher multiples than the actual multiples the transaction was completed at as Endurance is a rapidly growing company and the purchasers would have based the valuation on the revenues and EBITDA of the company at the time of the purchase.)

        The second transaction was Endurance's purchase of Hostgator on July 13, 2012. Endurance paid approximately $300 million in cash and assumed liabilites of approximately $21.8 million resulting in a total value of approximately $321.6 million.  Annualizing Hostgators results for the first 6.5 months of 2012, results in multiples of roughly 2.4x revenue and 7.5x EBITDA. 

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 - January 31, 2013

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.)

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.

Internet Infrastructure Coalition (i2C)

Cheval Capital is pleased to be a charter member of the Internet Infrastructure Coalition.  

The I2 coalition supports those who build the nuts and bolts of the Internet.  The coalition believes the continued growth of the Internet is vital for growing an environment of innovation in America and it seeks to engage in ways to foster success of the Internet and Internet infrastructure industry.

Please check out their website at http://i2coalition.com/ and lend your support!

Hillary Stiff & Frank Stiff

Hillary Stiff - PingZine 2012 Article

The folks at PingZine were kind enough to send over a reprint of a Q&A they did with Hillary Stiff on valuations and acquisitions for their 2012 CPanel Special Edition.  

Data Center Knowledge Article

Data Center Knowledge with a summary of Hillary Stiff's HostingCon panel.

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.  

SingleHop - #25 on Inc Magazine's List of the Fastest Growing Companies

Congratulations to the guys at SingleHop for making #25 on Inc Magazine's list of the fastest growing companies in America.  Their profile is here and there is a nice article on how they got started here.

HostingCon 2011 - How the Big Buyers Look At Acquisitions

This turned out to be a great panel with Hillary Stiff (Managing Director of Cheval Capital), Ditlev Bredahl (CEO of OnApp), Joe Bardenheier (SVP of Endurance), Mike Jones (CFO of Softlayer), and Sumeet Sabharwal (SVP of Navisite.) There were no slides but David Snead posted a description of the panel with some of its key thoughts on his WHIR blog.  If you aren't aware of David Snead, he is a well regarded, Washington D.C. attorney that works exclusively with companies that provide the infrastructure supporting the internet and those who create and distribute products and services electronically.  His website is here.

Hillary Stiff & Frank Stiff