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  1. #1

    How much worth it has?


    First of all, I am sorry if it is a wrong section.

    I am going to purchase an established hosting business active from the last 6 month. They have monthly sales of 8000 Euros & 1800-2000 Euros net profit every month. This is a dedicated servers reselling business. I am in contact with their administration, but I am not sure what will be it's worth. currently, they have about 35 dedicated servers client & mostly are with them from the last 3-4 months & purchasing more servers regularly. It's growing & selling 8-10 new servers every month.

    I have reviewed all documents & records in details (I wouldn't like to disclose here, sorry), but I am confused what bid should I offer. Can someone help me about it's worth. What bid should I offer? I want to acquire this & want to offer them some realistic & reasonable bid.

    I hope someone will help me.


  2. #2
    Join Date
    Dec 2007
    Indiana, USA
    Depending on how long they've been in business, their churn rate, and a lot of other factors I'd probably not offer more than what their 12 month revenue is (actual revenue, not projected revenue). If it's a new company or doesn't have a long track record I'd adjust accordingly.

    Again, I'm just throwing some basic information out there.
    Michael Denney - MDDHosting LLC
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  3. #3
    Okay, any other suggestions?

  4. #4
    Join Date
    Apr 2006
    Try asking their clients on how good they are. Since you're not sure if you buy them clients start moving out because of the service.
    Philippine Web Hosting Company
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  5. #5
    Join Date
    Oct 2007
    Hong Kong
    So they are not yet one year old? Why are they looking to sell out if they are netting 2000 euros after just 6 months? | HostGamma Europe | HostGamma Asia
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  6. #6
    Try asking their clients on how good they are. Since you're not sure if you buy them clients start moving out because of the service.
    I checked their tickets response in their whmcs & overall rate is 4.9 & look like clients are satisfy & use subscription.

    So they are not yet one year old? Why are they looking to sell out if they are netting 2000 euros after just 6 months?
    No, they are 3 years old, but too active from 7 & half months. They are not selling it, however I have good money & I wish to invest in hosting business. That's why, I am acquiring them.

  7. #7
    Join Date
    Jun 2010
    London UK
    They could easily sort that problem by hiring someone, why go through all that trouble to sell it as soon as you make some decent profit?

  8. #8
    Join Date
    Oct 2002
    Hong Kong
    It depends on many factors, but assuming its a healthy business and since you want a ballpark figure i'd say 10-16 times the monthly recurring revenue.

  9. #9
    Actually, It's my friend company & he is in hosting business from the last 4-5 years. Few days back, we were discussing about businesses & I told him that I am willing to start my own hosting business. He told me that it's not quite easy & he has separate Shared, reseller, VPS & dedicated servers business & if I have money, he will sale vps & dedicated servers business as he is happy with shared & reseller plan. VPS & dedicated is a burden on him & if I really want he will sale.

    I asked him many times about BIN, but he is saying that make some fair offer & he will consider. So, in this situation, I don't want to offer any non-sense bid & present myself a fool. That's why, I am asking for help.

    Everything is genuine & okay. 2000 Euros is monthly net profit from 40 dedicated server clients. Should I make an offer of 25,000 Euros? Is it good one?


  10. #10
    The simplest way is to know their net assets value in their balance sheet..your bid should not be more than their net assets.. and if they ask for any business goodwill (future prospects) it should be more than the average of their 6 months earnings...

    further the intangible factors are like in how much time you can get your investment back.. or come to break even point...your part in management etc..

  11. #11
    Join Date
    Apr 2000
    It sounds like you are just buying the dedicated customer base.. no domain name and site to go with it.

    That to me presents a large issue. You will not grow for a while. You will have to establish a name and create your own customers. He is currently generating them from his already established hosting company.

    You should give that a lot of thought. Now, if he built a site for the dedicated and VPS servers side of the business, then that is different. That would be in your favor. Otherwise, you will have a lot of work ahead of you to start getting customers of your own.

    Also, it sounds like he just started into the dedicated server and VPS side of things, and decided it is too much work for him to keep up with. Make sure you are up for the challenge. As such, are you a server admin? If not, you will need to hire people, and that would negate your profits right off the start.

    From the info provided so far, I feel that the $25,000 bid is far, far too high. It may be worth that much to him, but he started it, and has the position to keep growing it. Also, if most of the new servers are from the last 3 or 4 months, then you don't know what their churn rate will be. They are all too new.
    Think about that, and go from there.

    Best wishes.

    Tim L
    Superior Host LLC - Quality Web Hosting since 1998
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