[isp-investor] RE: isp-investor digest: February 20, 2004

With all due respect, you are quite incorrect. The buyers 'cost to provide access' has nothing to do with the deferred revenues calculation. It does factor into other considerations, but not deferred revenues. As for the person who just posted that their buyer does not deduct for deferred revenues, that is highly unlikely (or foolish). My guess is that they simply offer a lower multiple to start with. To expect a buyer to pay full price for a sub that has already paid the seller is not realistic. The seller either has to turn over the deferred revenues as cash, or the amount must be deducted from the sale. HR ----- Original Message ----- From: "get in thegame" <pma@...> To: <isp-investor@isp-investor.com> Sent: Tuesday, February 24, 2004 1:51 PM Subject: [isp-investor] RE: isp-investor digest: February 20, 2004 > this is a wrong way to calculate > it assumes that the buyer's cost to provide access is equal to what the > seller has already collected (only subtract the "cost" to provide access > through the prepaid term) > > > ----- Original Message ----- > From: "Hillary Stiff" <hstiff@...> > To: <isp-investor@isp-investor.com> > Sent: Tuesday, February 24, 2004 11:55 AM > Subject: [isp-investor] RE: isp-investor digest: February 20, 2004 > > > > My experience is that most acquirers deduct for prepaids (AKA deferred > > revenue). Generally the deduction is 100%. For example, lets assume a > deal > > is cut at 1x annualized revenue and the deal closes on March 1st and that > > there is a deduction for prepaids/deferred revenue. > > > > Customer A pays $20 monthly. > > Customer B pays $60 quarterly his next renewal date is March 1st. > > Customer C pays $60 quarterly his last renewal date was February 1st. > > Customer D pays $200 annually his last renewal date was January 1st. > > > > Customer A would be worth $240 ($20 monthly rate x 12 months x multiple of > > 1). > > Customer B would be worth $240 ($60 quarterly rate x 4 months x multiple > of > > 1). > > Customer C would be worth $200 ($60 quarterly rate x 4 months x multiple > of > > 1 - $40) The $40 deduction is for the customer's prepaid payment for March > > and April, the seller has collected and the buyer will have to provide the > > service for no compensation. > > Customer D would be worth $33.33 ($200 annual rate x multiple of 1 - > > $166.67) The $166.67 represents the ten months of service that the > customer > > has paid for, the seller has collected, but for which the buyer has to > > provide service for with no payment. > > > > The deduction for deferred revenue/prepaids is not 100% consistent, but it > > is definitely the norm. It is important to understand how a seller will > > treat deferred revenue when you compare offers from one buyer to another. > > For instance we represent a buyer who does not deduct for deferred > > revenue/prepaids. When a buyer does not adjust for deferred > > revenues/prepaids you may end up with an effective multiple which is much > > higher than the stated multiple. For example lets take Customer D again > > (Customers A and B would be treated the same as in the first example.) > > > > Customer D pays $200 annually his last renewal date was January 1st. > > > > Our buyer who does not adjust for deferred revenue/prepaids would pay $200 > > for Customer D ($200 annual rate x multiple of 1). What is interesting > > about this example is that the seller just received $200 from this > customer > > on January 1st and then provided two months of service to the customer, so > > lets assume the seller still has value of $166.67 from this customer(which > > represents the ten months of service that the seller has been paid for but > > doesn't have to provide service for) then the buyer pays $200 at the > close. > > Effectively for this customer you have received $200 from the buyer and > also > > still have $166.67 in the bank account from the customer, a total of > > $366.67, effectively a much higher multiple than 1x. > > > > In summary, if you have a significant number of quarterly or annual > prepays > > how a buyer handles how deferred revenue/prepaids can be a big issue! > > > > This can be a confusing issue to describe, hopefully I haven't confused > the > > issue even more. > > > > Best Regards, > > > > Hillary Stiff > > > > -------------------- > > Cheval Capital, Inc. > > www.chevalcapital.com > > 901 N Pitt Street > > Suite 110 > > Alexandria, Virginia 22314 > > 703-549-8602 > > hstiff@... > > > > > > > > -----Original Message----- > > From: ISP-INVESTOR Discussion List digest > > [mailto:isp-investor@...] > > Sent: Saturday, February 21, 2004 3:00 AM > > To: isp-investor digest recipients > > Subject: isp-investor digest: February 20, 2004 > > > > > > ISP-INVESTOR Digest for Friday, February 20, 2004. > > > > 1. Intellectual Property Web Hosting Company for Sale > > 2. RE: Small hosting for sale > > 3. Terms for the web hosting business > > 4. RE: Small hosting for sale > > 5. RE: Terms for the web hosting business > > > > ---------------------------------------------------------------------- > > > > Subject: Intellectual Property Web Hosting Company for Sale > > From: "Joseph P Marino" <ceo@...> > > Date: Fri, 20 Feb 2004 08:52:27 -0500 > > X-Message-Number: 1 > > > > Hello, > > > > I am currently selling a start-up web hosting company that specializes > > in secure business-class hosting solutions, no subscribers are included > this > > is a pure technology\Intellectual Property deal, company will come with > > business plan that was written in order to successfully launch and operate > > the business for 3 years. The company can be broken down into about 4 > > companies with it's technology, company comes with full front-end web site > > professionally developed by a marketing firm from nyc, all interfaces can > > easily be co-branded and re-sold. Web site is very advanced it has > > everything, sets up new accounts, live chat, excepts cc's , checks in > > real-time etc everything, also includes back-end functions to work with > your > > internal sales and support operations. > > > > Technology includes: > > - proprietary full fledged control panel for virtual hosting clients > > - proprietary web-based e-mail client, with a wide array of advanced > > security features including spam filtering > > - proprietary web hosting module that integrates with apache that improves > > the performance and security of your web server, the module blows > Interland > > blueHalo's technology away performance and security wise > > > > This deal is perfect for any company looking to expand or re-brand itself > or > > you can do a secure business-class hosting spin-off > > > > Above is just some of the technology included in the deal I could go on > for > > about 20 minutes explaining all features and benefits, if you are curious > as > > to why I am selling this company it is because I've been occupied recently > > with another project as I do not have any free time for this project > > anymore. > > > > Please contact me off-list if you are interested, I will follow up with a > > phone call and my lawyer\partner will follow up with an NDA > > > > > > > > ---------------------------------------------------------------------- > > > > Subject: RE: Small hosting for sale > > From: "Gary Carr" <gc_list@...> > > Date: Fri, 20 Feb 2004 11:39:06 -0500 > > X-Message-Number: 2 > > > > My understanding from past deals was that yearly prepays usually get > > deducted from the payout of the accounts as they are a liability until > they > > renew. > > > > > > > > Gary > > > > > > > > > > > > > > Gary, > > > > > > > > > > > > I don't know it's question more than a statement? What do you think? > > > > > > > > > > > > ted gibson > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > --- On Thu 02/19, Gary Carr < gc_list@... > wrote: > > > > > > From: Gary Carr [mailto: gc_list@...] > > > > > > To: isp-investor@isp-investor.com > > > > > > Date: Thu, 19 Feb 2004 15:23:53 -0500 > > > > > > Subject: [isp-investor] RE: Small hosting for sale > > > > > > > > > > > > > Cash is good, but terms are OK, the price just as much I can get, what > > is a small prepaid hosting going for 1.0 maybe 1.5, I don't know, >it's > > not that much money. >? What area(s) are Hmm, are yearly > > prepaid accounts going for 1.0 and up? Gary > Carr 705A > > Wesley Pines Rd. COL Networks, Inc. Lumberton, NC 28358 Phone: > > 910-618-9790 x 13 Fax: 910-618-9027 Check us out at: > > www.carolina.net ___________ The ISP-INVESTOR > > Discussion List ___________ To Join: > > mailto:join-isp-investor@isp-investor.com To Remove: > > mailto:remove-isp-investor@isp-investor.com Archives: > > http://isp-lists.isp-planet.com/isp-investor/archives/ To unsubscribe > via > > postal mail, please contact us at: Jupitermedia Corp. Attn: > Discussion > > List Management 475 Park Avenue South New York, NY > 10016 Please > > include the email address which you have been contacted > > with. ------------------------ANNOUNCEME! > > > > > > NT--------------------------------- ------------------------------------- > > -------------------------------- ** ISPCON Spring 2004 ** > > Washington DC Hilton & Towers ** ** The industry's ISP and WISP > > event ** www.ispcon.com ** ** 10 years experience illuminating > the > > market's future > > > ** ---------------------------------------------------------------------- > > > ---------------------------------------------------------------------- > r> > > > > > > _______________________________________________ > > > > > > > > > > > > To unsubscribe via postal mail, please contact us at: > > > Jupitermedia Corp. > > > Attn: Discussion List Management > > > 475 Park Avenue South > > > New York, NY 10016 > > > > > > Please include the email address which you have been contacted with. > > > > > > ------------------------ANNOUNCEMENT--------------------------------- > > > --------------------------------------------------------------------- > > > ** ISPCON Spring 2004 ** Washington DC Hilton & Towers ** > > > ** The industry's ISP and WISP event ** www.ispcon.com ** > > > ** 10 years experience illuminating the market's future ** > > > ---------------------------------------------------------------------- > > > ---------------------------------------------------------------------- > > > > > > > > > > > ---------------------------------------------------------------------- > > > > Subject: Terms for the web hosting business > > From: "Ted Gibson" <ted.gibson@...> > > Date: Fri, 20 Feb 2004 14:43:08 -0500 (EST) > > X-Message-Number: 3 > > > > > > > > > > > > > > All, > > > > > > > > Several people have been asking me about terms for the web hosting. > > > > > > > > See if this makes since. > > > > > > > > The business did $26, 875 in 2003. > > > > > > > > I was thinking a sealing price of .75 of yearly revenue $21,150 with 40% > > $8,400 with 12 payments of $1,050 > > > > > > > > or maybe .85, $22,800 with 25% $6,840 with 18 payments of $890. > > > > > > > > I don't know whatever works for you? > > > > > > > > Ted > > > > > > > > _______________________________________________ > > > > > > ---------------------------------------------------------------------- > > > > Subject: RE: Small hosting for sale > > From: "Ted Gibson" <ted.gibson@...> > > Date: Fri, 20 Feb 2004 14:44:49 -0500 (EST) > > X-Message-Number: 4 > > > > > > > > > > Me too, you come with a price and then reduce by the months left, I think > > that's how it works, right? > > > > > > > > ted > > > > > > > > > > > > > > > > --- On Fri 02/20, Gary Carr < gc_list@... > wrote: > > > > From: Gary Carr [mailto: gc_list@...] > > > > To: isp-investor@isp-investor.com > > > > Date: Fri, 20 Feb 2004 11:39:06 -0500 > > > > Subject: [isp-investor] RE: Small hosting for sale > > > > > > > > My understanding from past deals was that yearly prepays usually > > get deducted from the payout of the accounts as they are a liability > > until they renew. Gary > > > > Gary, > > > > I don't know it's question more than a > statement? > > What do you think? > > > > ted > > > gibson > > > > > > > > > > > > > > > > --- On Thu 02/19, Gary Carr < gc_list@... > wrote: > > > > From: Gary Carr [mailto: gc_list@...] > > To: > > isp-investor@isp-investor.com > > Date: Thu, 19 Feb 2004 > > 15:23:53 -0500 > > Subject: [isp-investor] RE: Small hosting for > > sale > > > > > Cash is good, but terms are OK, the price just > as > > much I can get, what is a small prepaid hosting going for 1.0 maybe > > 1.5, I don't know, >it's not that much money. >? What area(s) > > are Hmm, are yearly prepaid accounts going for 1.0 and > > up? Gary Car! > > r 705A Wesley Pines Rd. COL Networks, Inc. Lumberton, NC > > 28358 Phone: 910-618-9790 x 13 Fax: 910-618-9027 Check us out > > at: www.carolina.net ___________ The > > ISP-INVESTOR Discussion List ___________ To > > Join: mailto:join-isp-investor@isp-investor.com To > > > Remove: mailto:remove-isp-investor@isp-investor.com Archives: http: > > //isp-lists.isp-planet.com/isp-investor/archives/ To unsubscribe > > via postal mail, please contact us at: Jupitermedia Corp. Attn: > > Discussion List Management 475 Park Avenue South New York, NY > > 10016 Please include the email address which you have been > > > contacted with. ------------------------ANNOUNCEME! > NT---- > > ----------------------------- ------------------------------------- > -- > > ------------------------------ ** ISPCON Spring 2004 > > ** Washington DC Hilton & Towers ** ** The industry's ISP and > > WISP event ** www.ispcon! > > .com ** ** 10 years experience illuminating the market's > > > future ** ------------------------------------------------------------ > > ---------- -------------------------------------------------------- > -- > > ------------<b r> > > > > _______________________________________________ > > > > Join: > > mailto:join-isp-investor@isp-investor.com > To Remove: > > mailto:remove-isp-investor@isp-investor.com > Archives: > > http://isp-lists.isp-planet.com/isp-investor/archives/ > To unsubscribe > > via postal mail, please contact us at: > Jupitermedia Corp. > Attn: > > Discussion List Management > 475 Park Avenue South > New York, NY > > 10016 > > Please include the email address which you have been > > contacted > > > with. > > ------------------------ANNOUNCEMENT------------------------ > > --------- > ----------------------------------------------------------- > -- > > -------- > ** IS! > > PCON Spring 2004 ** Washington DC Hilton & Towers ** > ** The > > industry's ISP and WISP event ** www.ispcon.com ** > ** 10 years > > experience illuminating the market's future > > > ** > -------------------------------------------------------------------- > > -- > ------------------------------------------------------------------ > -- > > -- > ___________ The ISP-INVESTOR Discussion List > > > Remove: mailto:remove-isp-investor@isp-investor.com Archives: > > http://isp-lists.isp-planet.com/isp-investor/archives/ To unsubscribe > via > > postal mail, please contact us at: Jupitermedia Corp. Attn: > Discussion > > List Management 475 Park Avenue South New York, NY > 10016 Please > > include the email address which you have been contacted > > > with. ------------------------ANNOUNCEMENT--------------------------- > > ------ --------------------------------------------------------------! > > ------- ** ISPCON Spring 2004 ** Washington DC Hilton & Towers > > ** ** The industry's ISP and WISP event ** www.ispcon.com ** > > ** 10 years experience illuminating the market's future > > > ** ---------------------------------------------------------------------- > > > ---------------------------------------------------------------------- > r> > > > > _______________________________________________ > > > > > > ---------------------------------------------------------------------- > > > > Subject: RE: Terms for the web hosting business > > From: "Ted Gibson" <ted.gibson@...> > > Date: Fri, 20 Feb 2004 14:59:41 -0500 (EST) > > X-Message-Number: 5 > > > > > > I did some work for a company that is in the business of move skinny > > minutes, by that I mean calling card company has a customer and they call > a > > toll-free that is routed to a call number in every lata in the US and then > > this company changes the voice to VOIP so they don't have to pay the > tariff > > costs, moved to the lata where the customer is calling and then gives it > > back to the local ILEC for a free local call. > > > > > > > > The calling card or ATT wireless just about anyone that sells long > distance > > uses them pays $.007 a minute to this company and then the calling card > > charges their customers 3 to 10 cents a minute. > > > > > > > > This company started in business as ISP and hosting company, but wants to > > get out of the retail. They already sold the 6,000 customer $29.95 a month > > for unlimited long distance. > > > > > > > > I just purchased the 275 to 300 customer web hosting piece of the business > > (small $26,875 in 2003). All of which is billed monthly or yearly to the > > customers credit cards. > > > > > > > > The web hosting and web email comes with 3 front end web servers (sun) and > a > > back end SQL. The system also has a control panel so customers can make > > their own changes. > > > > > > > > I don't want to get tried down to something for $2K a month, so I'm > flipping > > it. > > > > > > > > Thats about all there is. > > > > > > > > ted > > > > > > > > > > > > > > > > > > > > > > > > > > > > --- On Fri 02/20, Kristopher Pilles kpilles@... wrote: > > > > From: Kristopher Pilles [mailto: kpilles@...] > > > > To: ted.gibson@... > > > > Date: Fri, 20 Feb 2004 14:45:10 -0500 > > > > Subject: RE: [isp-investor] Terms for the web hosting business > > > > > > > > Hi Ted. Can you send me more information on what you are selling, I > > caught the tail end of this thread but we are > > interested -----Original Message----- From: Ted Gibson > > [mailto:ted.gibson@...] Sent: Friday, February 20, 2004 2:43 > > PM To: isp-investor@isp-investor.com Subject: [isp-investor] Terms > for > > the web hosting > > business All, Several people > > have been asking me about terms for the web hosting. See if > > this makes since. The business did $26, 875 in > > 2003. I was thinking a sealing price of .75 of yearly > revenue > > $21,150 with 40% $8,400 with 12 payments of $1,050 or > > maybe .85, $22,800 with 25% $6,840 with 18 payments of > > $890. I don't know whatever works for > > > you? Ted _____________________________________ > > ___________ To! > > Join: mailto:join-isp-investor@isp-investor.com To Remove: > > mailto:remove-isp-investor@isp-investor.com Archives: > > http://isp-lists.isp-planet.com/isp-investor/archives/ To unsubscribe > via > > postal mail, please contact us at: Jupitermedia Corp. Attn: Discussion > > List Management 475 Park Avenue South New York, NY > 10016 Please > > include the email address which you have been contacted with. > > > > _______________________________________________ > > > > > > > > > > --- > > > > END OF DIGEST > > > > > > --- > > You are currently subscribed to isp-investor as: hstiff@... > > To unsubscribe send a blank email to > > %%email.unsub%% > > To unsubscribe via postal mail, please contact us at: > > Jupitermedia Corp. > > Attn: Discussion List Management > > 475 Park Avenue South > > New York, NY 10016 > > > > Please include the email address which you have been contacted with. > > > > > > > > > > > > To unsubscribe via postal mail, please contact us at: > > Jupitermedia Corp. > > Attn: Discussion List Management > > 475 Park Avenue South > > New York, NY 10016 > > > > Please include the email address which you have been contacted with. > > > > > > To unsubscribe via postal mail, please contact us at: > Jupitermedia Corp. > Attn: Discussion List Management > 475 Park Avenue South > New York, NY 10016 > > Please include the email address which you have been contacted with. > > To unsubscribe via postal mail, please contact us at: Jupitermedia Corp. Attn: Discussion List Management 475 Park Avenue South New York, NY 10016 Please include the email address which you have been contacted with.

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