UK hosting client base for sale - using Ensim Linux Servers - almost 200 packages
We are a small UK company that has been hosting customers' websites since 1999. Unfortunately hosting is no longer our core business and we feel the time has now come to sell our hosting clients to another firm to generate cash for other projects.
Hence we are interested in selling our 135 hosting customers which have purchased almost 200 hosting packages with us. To the best of our knowledge none of the websites we host are used for adult or spam purposes.
Service Plan Breakdown (details correct at time of posting)
70 x Standard Package 1 (100MB disk, 1GB/m bandwidth), @ 49.99 each*
42 x Standard Package 2 (500MB disk, 2GB/m bandwidth), @ 99.99 each*
23 x Standard Package 3 (1000MB disk, 5GB/m bandwidth), @ 199.99 each*
3 x Standard Package 4 (2000MB disk, 8GB/m bandwidth), @ 299.99 each*
0 x Standard Package 1 (Not available when paying quarterly)
20 x Standard Package 2 (500MB disk, 2GB/m bandwidth), @ 29.97 each*
22 x Standard Package 3 (1000MB disk, 5GB/m bandwidth), @ 59.97 each*
1 x Standard Package 4 (2000MB disk, 8GB/m bandwidth), @ 89.97 each*
* This is the price paid by the vast majority of customers with the following exceptions:
1. Our best web hosting customer has 21 hosting packages (of different types) with us and we have recently agreed to a 3 for the price of 2 offer for Package 2 to prevent him moving to a rival ISP. We feel it would be in the best interests of the buyer to maintain this, or an alternative offer of similar value, with this customer.
2. One hosting customer has 9 x Package 3 (Quarterly) with us and gets these and additional packages for a reduced price of £155.76 due to a discount deal we agreed last year.
3. One customer has purchased an annual E-commerce package for a reduced price of £249.00 as no SSL certificate was required.
In addition to the hosting packages there are approximately 400 domain names (mostly a mixture of .com's and .co.uk's) which we have registered on behalf of customers. Renewals are billed at £14 + VAT for a 1 year US domain or a 2 year UK domain, yielding a reasonable margin.
There are also a small number of accounts which require web and/or email forwarding only (no hosting). Web forwarding is supplied free of charge with domain names, but we charge customers a small fee for email forwarding.
Revenue for the next six months
Estimated revenue for the next six months (excluding domain renewals, but assuming all hosting packages are renewed):
June 2005 (partially invoiced and collected): From Annual Packages £941, From Quarterly Packages £596.88, Total £1537.55
July 2005 (partially invoiced): From Annual Packages £1086, From Quarterly Packages £644.43, Total £1730.43
Aug 2005: From Annual Packages £894, From Quarterly Packages £0, Total £894
Sept 2005: From Annual Packages £2196, From Quarterly Packages £89.44, Total £2,285.44
Oct 2005: From Annual Packages £2821, From Quarterly Packages £0, Total £2821
Nov 2005: From Annual Packages £790, From Quarterly Packages £0, Total £790
Total estimated revenue pa (assuming all renew) is approximately £24,000. About 95% of our clients are based in the UK and all pay in British Pounds. Payment is by credit/debit card (including some Solo/Switch/Visa Debit cards), cheque or BACS. We invoice customers for all hosting and domain renewals and expect payment within 30 days, although a small number of customers have asked us to debit their credit/debit cards automatically when renewals are due.
Our client base has proven to be extremely loyal with a low churn rate. Customers who do leave us tend to do so only because we are unable to provide them with additional services such as dedicated servers.
Gross profit figures are unavailable as it would be almost impossible to separate the web hosting expenses from the total overheads of the business, but we feel there is plenty of margin in the plans outlined above as we have never attempted to compete in the budget end of the market.
Although we did experiment with advertising a few years ago, what little new business we get now comes from existing customers, a little from word of mouth, and the occasional visitor who stumbles across our website. As our main website and company domain name are not included in the sale, search engine rankings are of no importance.
All packages are hosting on one of three servers (AMD Athlon XP 2600+ with 1.5GB of RAM) all running the latest release of Ensim Linux Pro on Fedora. It is important to stress that these servers are not included in the sale as we intend to use them in other areas of our business.
Bandwidth and disk requirements are very modest for all users and one of our servers (the one hosting the e-commerce packages) is only running at a fraction of its capacity. Hosting all of the websites on three servers requires a total of 18 public IP addresses, most of which are used for the e-commerce SSL hosting packages.
Thirteen E-commerce packages come with a dedicated QuickSSL certificate from Geotrust which is included in the price of the hosting.
Although Ensim does have DNS server capabilities, we use a separate DNS server for customerís accounts (running djbdns) as we have found it easier to manage. DNS records are generated automatically by a PHP script; however a very small number of customers have a manual DNS record as they have specified their own MX record.
Billing is currently handled by our own in-house system with data stored in MySQL. We would be happy to export this to Excel or similar.
Technical Support and Customer Service Required
All support queries are handled by email as we do not have a trouble ticketing system. Telephone support is unavailable to all but a few of our best customers. We normally receive between 0 and 5 technical support enquiries a day, mostly from new customers who have just signed up. We normally receive between 0 and 4 sales/billing enquiries each day. Many of these relate to paying existing invoices (as customers have been unable to do this online) and upgrading/downgrading accounts. Almost all billing enquiries from existing customers could be eliminated if customers were able to manage their account online.
Many of our customers use Tomcat and a small number of websites have been setup with custom Tomcat policies/permissions which will need to be transferred to the new servers. As a fair number of support enquiries are Tomcat related, please make sure you have the necessary in-house skills to handle these.
What's on offer
(Subject to contract)
Sale of all hosting and domain name clients from our company to yours with the exception of a small number we deal with personally and do other IT work for. We have not yet informed customers of this sale as we would prefer to do this after liaising with the buyer.
Because our company is involved in other business areas we are not looking to sell the company as a whole. We will continue to offer web hosting, email and domain services to customers, but only as an integral and auxiliary part of other services we provide (e.g. to support our new hosted e-commerce software). We have no desire to compete in the 'pure' web hosting market again and will gladly sign a document to this effect if required.
We are Nominet tag holders and intend to retain our Nominet account as we will need to register domains for customers in the future. All non-UK domain names are held with OpenSRS, as are the 13 SSL certificates we have purchased for clients. We will provide assistance transferring domain names and SSL certificates from our accounts to yours.
Upon receipt of payment we will release the root passwords to the servers. The buyer will be responsible for migrating the accounts from our servers to their servers, although we will be on hand to provide assistance for a period of 30 days to ensure a smooth transition. We have no intention of abandoning these customers whom we have worked so long and hard to please.
It is worth emphasizing that almost all customers have only received sales and technical support by email thus far, so we expect these customers will be delighted to move to a company which can provide some level of telephone support.
Our ideal buyer will be based in the UK, already use the Ensim control panel software on Linux, and would ideally favour a face-to-face meeting to discuss this opportunity in more depth (though this is optional). Although the price offered is important, it is vital to us that our hosting customers go to a good home. We will not go ahead with the sale, or release confidential information about our company, unless we have a high degree of confidence in you and/or your business and you sign a confidentiality agreement beforehand.
We are looking for a one-off payment to help fund development of our new software and forthcoming capital expenditure, so unfortunately any other payment arrangements will not be of interest to us. We are happy to have your accountant and/or lawyer perform due diligence if required, but this will be at your own expense as normal.
We are in no particular hurry to sell but can move quickly, subject to contract, once the right offer is received.
Although we have tried to include as much information as possible in this post, please let us know if you need further information and we will try to post it below. For obvious reasons, confidential information regarding our company can only be disclosed to serious buyers upon signing an NDA.
Please direct all enquiries to [email protected] We will try hard to respond directly to all messages, or post the answer below, but unfortunately our time is limited so the most serious enquiries will be answered first.
All information in this forum post is believed to be a full and accurate description of the sale at the time of posting. This advert does not form part of any contract for sale and is not a warranty. We will promise to do our best to provide all information we can as accurately as we reasonably can, but you should rely upon your own enquiries.
We are not looking for a quick sell, but a professional company able to give our customers the care they deserve. Please do not request more information unless you are able to submit a serious offer and have the necessary funds available. We reserve the right to ask for confirmation of this availability.
Unfortunately we can't do that Paul. We really want to get out of the "pure" web hosting business all together so we can focus on other projects.
The sale is still open but we have received a number of serious requests which we are pursuing. As a result of some of the questions raised, I would like to add the following information about the sale:
All servers are hosted in the UK, though we must reiterate: the servers are not for sale.
We do not have a figure in mind, even a ballpark one. However, we are more likely to sell to a company which has had experience transferring clients before and is able to ensure a smooth transfer process rather than an inexperienced company offering slightly more money. In other words, we are looking at the full picture.
We have been asked whether or not our clients requested Ensim at the time of purchase. The answer is no. Whilst we think the majority of our clients would be happy to move to another hosting control panel, this could be a risky move. Hence we would much rather sell our clients to a company which already uses Ensim on Linux.
As always, if you would like to know more, please get in touch.