Cheval Celebrates Transactions and Growth!
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 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.
Below are a few of the of the observations about the hosting, cloud and relevant small business markets.
SMB hosting/cloud business is a market of mass-market-products: While this isn’t new, it is intriguing to many that such a large proportion of the SMB suppliers in the hosting/cloud space are companies offering a limited 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 slows down? 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. 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 providers with slow expansion segments appear to be pursuing one or more of several avenues;.
o Using marketing and sales strategies to take away customers from other providers.
o Expanding into new and related products/services or the ones with 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. The smaller providers typically tend to concentrate on one or 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, providers in these segments are expected to diversify into providing a wider range of products/services with related client bases, or go for M&A to acquire customers or leave business.
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