Finding Ways To Keep Up With Funds

Cheval Capital Celebrates Expansion and 400th Transaction!

It was all excitement as the this Cheval Capital celebrated 400th transaction! Since the company entered the business in the late 1990’s Hillary and Frank have assisted companies in cloud hosting, and even IAAS businesses navigate the tricky waters of both mergers and acquisitions, corporate finance and financings.

The 400-transaction benchmark also marked the 25th closed transactions in 2017! The company has completed many transactions in the last few months in many companies including Ireland, Australia, New Zealand, China, Israel, the US and Canada.

The great industry expertise and the extensive network has facilitated in ensuring that clients get maximum value in the aspects of their business regardless of location.

According to Hillary Stiff, the company has grown even as suppliers have struggled with growth and turning to acquisitions. This acquisition requirement has supported prices and led to an active transaction marketplace.

As the year begins, here are a few highlights regarding a hosting company, cloud, and related small business markets.

SMB hosting/cloud business is an industry of mass-market-products: Even though this is not new, it’s interesting how such a massive percentage of those SMB providers from the hosting/cloud area are businesses offering a restricted set of products/services on a mass-market. This kind of focus on a limited product/service set is very good for many reasons, but it may also cause problems, especially when market expansion slows because of maturation or challenges of competition from substitutes.

What happens when growth rate reduces? As market growth has slowed down in many business segments, the limited product/service set suppliers in those sections have witnessed slow growth along with it. To begin with, providers who have been growing slower than the industry with have experienced trouble replacing ordinary attrition, and a few have started to shrink.

Alternatives: Service suppliers in such slow development sections seem to be chasing at least one of many avenues;.

o Utilizing sales and marketing to take customers from competitors.

o Expanding the range of products/services which are either closely related or possess related customer bases.

o Leaving customer growth as a goal and focusing on running the company to maximize the cash flow from these clients (possibly for distribution to owners or for expansion into unrelated businesses).

o Employing M&A to obtain clients or exit the business enterprise.

It seems larger suppliers pursue several of those options concurrently. On the other hand, the small to average -sized providers typically tend to focus on one or a maximum of two.

While some suppliers can take customers away from others and continue growth tough it can be complicated unless one is providing exceptional goods or services. Therefore, such suppliers in such sections may choose to diversify into a broader range of products/services with related client bases or utilize M&A to obtain clients or exit.