Cheval Capital Celebrates Growth!
It was all excitement as the this Cheval Capital celebrated 400th transaction! Since the company entered the business in the late 1990’s Hillary and Frank have assisted companies in cloud hosting, and even IAAS businesses navigate the tricky waters of both mergers and acquisitions, corporate finance and financings.
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 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 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.
There are several highlights regarding observations about the hosting, cloud and related business markets.
SMB hosting/cloud business is a market of siloed mass-market-products: Though this isn’t new, it’s intriguing to people that such a massive proportion of the SMB providers in the hosting/ cloud space are businesses offering a restricted set of products/services to a mass-market, frequently commoditized basis. 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 rate reduces? As market expansion has gone down in many industry segments, the restricted product/service set suppliers in these sections have observed their growth slow down together with it. Providers who were growing more slowly than the industry face lots of challenges in replacing standard attrition, and a few have begun to shrink.
Options: Service suppliers in such slow expansion segments are pursuing one or more of several paths;.
o Utilizing sales and marketing to take customers from competitors.
o Expanding into new products/services that are either related or share 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 Making use of M&A to acquire customers 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. 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.