We are excited to announce that Cheval Capital lately celebrated their 400th transaction! Ever since the company started a business in the late 1990’s the leaders have helped businesses in the cloud hosting, and IAAS businesses navigate the though tricky mergers and acquisitions, financings and corporate fund.
The benchmark which is the 400-transaction also marks the 25th transactions that were successfully closed in the last year! Within the last few months, many operations were completed with companies from various countries including in Ireland, Australia, China, New Zealand, Israel, Canada and the United States.
The extensive network and industry experience has been of great assistance to their clients by allowing them to get maximum value in their business irrespective of the geographical location.
According to their leaders, The company has achieved growth even as providers struggled with organic growth and turned to acquisitions instead. This acquisition demand supported prices and resulted in an active transaction market.
Below are a few of the of the observations about the hosting, cloud and relevant 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 focus on a restricted product/service set is terrific for several reasons, but it can also create issues, especially when market expansion slows because of either maturation or competition from substitutes.
What happens when growth rate reduces? As market expansion slow down in many industry segments, the limited product/service set providers in those segments have witnessed their growth slow together with it. Providers who were growing more slowly than the market have had trouble replacing normal attrition, and some have started to shrink.
Alternatives: Service suppliers in such slow development sections seem to be chasing at least one of many avenues;.
o Using marketing and sales strategies to take away customers from other providers.
o Expanding the range of products/services which are either closely related or possess related customer bases.
o Abandoning customer development as a target and running the company to maximize the money flow from these clients (possibly for distribution to owners or for growth into unrelated companies).
o Employing M&A to obtain clients or exit the business enterprise.
Generally, larger suppliers pursue several of these options concurrently. The smaller providers typically tend to concentrate on one or two.
While there will be a couple of providers that can take away customers from others and grow but this might not be feasible unless they provide new, exceptional products or solutions. So, such kind of suppliers may opt to diversify into a wider package of Products/services or use M&A to acquire clients or exit.