Re: [AFMUG] Current Market Value
In reality the after tax profit or pre tax profit is the thing you are after. Pre tax EBIDTA numbers are better because you can all kinds of tax management things if you have other companies or other revenue streams. And depending on whether you are a partnership S or C corp the taxation will be different. So EBIDTA is more of a true profit number. -Original Message- From: Steve Sent: Wednesday, February 15, 2017 2:54 PM To: af Subject: Re: [AFMUG] Current Market Value God points. Also about the EBITA - that is an interesting take on it. Thanks. - Original Message - From: "Lewis Bergman" To: "af" Sent: Tuesday, February 14, 2017 4:11:47 PM Subject: Re: [AFMUG] Current Market Value All the numbers I have heard mentioned are pretty close. I acquired a couple of wisp companies. The only thing I would say is I only paid based on what they were doing at the moment. I refused to pay them for my cost advantages or what I could do with it. One that had a bunch of old trango stuff I paid them 2x net for 2 years with the understanding that the expense to replace their crap was to be included. It ended up to be pretty cheap money wise but not time wise. They were going broke so just about anything was foods for them. In the end, I viewed it as a mistake. I think I could have picked up the pieces cheaper and with less hassles. Even though we did a better job their customers vied us as fresh meat to chew on. On Tue, Feb 14, 2017, 1:53 PM Chuck McCown wrote: Yeah, like 4X EBIDTA -Original Message- From: Keefe John Sent: Tuesday, February 14, 2017 10:47 AM To: af@afmug.com Subject: Re: [AFMUG] Current Market Value I would look at a multiple of estimated post-acquisition EBITA. That's what JAB does. On 2/14/2017 11:37 AM, Steve wrote: > What is the current market value for a WISP? > > I've posted this before years ago and it hasn't changed much from my > experience. Its always been 12-16 months of your average revenue per > customer (ARPU). It depends on the equipment and all the rest. We've sold > before and we know what others have sold for. SO we generally have a > good > idea what a WISP is worth. > > Now what if it were done with all the lower cost equipment (Mikrotik, > Ubiquiti) which is fine in many situations but we have all Cambium? > We'd > have to replace it all to fit it into our system. In all honesty we'd > replace everything and probably take a couple years or more to get our > return on investment which is fine. But if someone is asking a great deal > more it isn't worth it. > > There are other factors such as strategic locations. IP space and all > the > rest. However in our case we are already expanding in that direction and > thought this would be the quicker path. We'll spend about the same in the > next years putting up all new locations and equipment anyway. > > What is your opinion on the situation of someone who is asking way way way > more than what the market dictates?
Re: [AFMUG] Current Market Value
God points. Also about the EBITA - that is an interesting take on it. Thanks. - Original Message - From: "Lewis Bergman" To: "af" Sent: Tuesday, February 14, 2017 4:11:47 PM Subject: Re: [AFMUG] Current Market Value All the numbers I have heard mentioned are pretty close. I acquired a couple of wisp companies. The only thing I would say is I only paid based on what they were doing at the moment. I refused to pay them for my cost advantages or what I could do with it. One that had a bunch of old trango stuff I paid them 2x net for 2 years with the understanding that the expense to replace their crap was to be included. It ended up to be pretty cheap money wise but not time wise. They were going broke so just about anything was foods for them. In the end, I viewed it as a mistake. I think I could have picked up the pieces cheaper and with less hassles. Even though we did a better job their customers vied us as fresh meat to chew on. On Tue, Feb 14, 2017, 1:53 PM Chuck McCown wrote: > Yeah, like 4X EBIDTA > > -Original Message- > From: Keefe John > Sent: Tuesday, February 14, 2017 10:47 AM > To: af@afmug.com > Subject: Re: [AFMUG] Current Market Value > > I would look at a multiple of estimated post-acquisition EBITA. That's > what JAB does. > > > On 2/14/2017 11:37 AM, Steve wrote: > > What is the current market value for a WISP? > > > > I've posted this before years ago and it hasn't changed much from my > > experience. Its always been 12-16 months of your average revenue per > > customer (ARPU). It depends on the equipment and all the rest. We've > sold > > before and we know what others have sold for. SO we generally have a good > > idea what a WISP is worth. > > > > Now what if it were done with all the lower cost equipment (Mikrotik, > > Ubiquiti) which is fine in many situations but we have all Cambium? We'd > > have to replace it all to fit it into our system. In all honesty we'd > > replace everything and probably take a couple years or more to get our > > return on investment which is fine. But if someone is asking a great > deal > > more it isn't worth it. > > > > There are other factors such as strategic locations. IP space and all the > > rest. However in our case we are already expanding in that direction > and > > thought this would be the quicker path. We'll spend about the same in > the > > next years putting up all new locations and equipment anyway. > > > > What is your opinion on the situation of someone who is asking way way > way > > more than what the market dictates? > >
Re: [AFMUG] Current Market Value
All the numbers I have heard mentioned are pretty close. I acquired a couple of wisp companies. The only thing I would say is I only paid based on what they were doing at the moment. I refused to pay them for my cost advantages or what I could do with it. One that had a bunch of old trango stuff I paid them 2x net for 2 years with the understanding that the expense to replace their crap was to be included. It ended up to be pretty cheap money wise but not time wise. They were going broke so just about anything was foods for them. In the end, I viewed it as a mistake. I think I could have picked up the pieces cheaper and with less hassles. Even though we did a better job their customers vied us as fresh meat to chew on. On Tue, Feb 14, 2017, 1:53 PM Chuck McCown wrote: > Yeah, like 4X EBIDTA > > -Original Message- > From: Keefe John > Sent: Tuesday, February 14, 2017 10:47 AM > To: af@afmug.com > Subject: Re: [AFMUG] Current Market Value > > I would look at a multiple of estimated post-acquisition EBITA. That's > what JAB does. > > > On 2/14/2017 11:37 AM, Steve wrote: > > What is the current market value for a WISP? > > > > I've posted this before years ago and it hasn't changed much from my > > experience. Its always been 12-16 months of your average revenue per > > customer (ARPU). It depends on the equipment and all the rest. We've > sold > > before and we know what others have sold for. SO we generally have a good > > idea what a WISP is worth. > > > > Now what if it were done with all the lower cost equipment (Mikrotik, > > Ubiquiti) which is fine in many situations but we have all Cambium? We'd > > have to replace it all to fit it into our system. In all honesty we'd > > replace everything and probably take a couple years or more to get our > > return on investment which is fine. But if someone is asking a great > deal > > more it isn't worth it. > > > > There are other factors such as strategic locations. IP space and all the > > rest. However in our case we are already expanding in that direction > and > > thought this would be the quicker path. We'll spend about the same in > the > > next years putting up all new locations and equipment anyway. > > > > What is your opinion on the situation of someone who is asking way way > way > > more than what the market dictates? > >
Re: [AFMUG] Current Market Value
Yeah, like 4X EBIDTA -Original Message- From: Keefe John Sent: Tuesday, February 14, 2017 10:47 AM To: af@afmug.com Subject: Re: [AFMUG] Current Market Value I would look at a multiple of estimated post-acquisition EBITA. That's what JAB does. On 2/14/2017 11:37 AM, Steve wrote: What is the current market value for a WISP? I've posted this before years ago and it hasn't changed much from my experience. Its always been 12-16 months of your average revenue per customer (ARPU). It depends on the equipment and all the rest. We've sold before and we know what others have sold for. SO we generally have a good idea what a WISP is worth. Now what if it were done with all the lower cost equipment (Mikrotik, Ubiquiti) which is fine in many situations but we have all Cambium? We'd have to replace it all to fit it into our system. In all honesty we'd replace everything and probably take a couple years or more to get our return on investment which is fine. But if someone is asking a great deal more it isn't worth it. There are other factors such as strategic locations. IP space and all the rest. However in our case we are already expanding in that direction and thought this would be the quicker path. We'll spend about the same in the next years putting up all new locations and equipment anyway. What is your opinion on the situation of someone who is asking way way way more than what the market dictates?
Re: [AFMUG] Current Market Value
I agree. Our choices are 1) Overpay for something that is ok but not spectacular.. and put in all the work involved in migrating them into our network, spending money to upgrade and wait years for getting ROI. 2) Or continue to expand into an area with better equipment, more reliable speeds and compete. They made the decision for us. However I was hoping some people had some experience and could offer their approximate values you've seen in the past. I want to be sure. - Original Message - From: "Lewis Bergman" To: "af" Sent: Tuesday, February 14, 2017 2:05:19 PM Subject: Re: [AFMUG] Current Market Value I have always approached this question from a single point of view. What is it worth to you? Once you know the answer to that question it doesn't really matter what they are asking. You offer what you are comfortable with. If they don't like it, you were already planning to expand so continue with those plans. They may become more reasonable. On Tue, Feb 14, 2017, 11:47 AM Keefe John wrote: > I would look at a multiple of estimated post-acquisition EBITA. That's > what JAB does. > > > On 2/14/2017 11:37 AM, Steve wrote: > > What is the current market value for a WISP? > > > > I've posted this before years ago and it hasn't changed much from my > experience. Its always been 12-16 months of your average revenue per > customer (ARPU). It depends on the equipment and all the rest. We've sold > before and we know what others have sold for. SO we generally have a good > idea what a WISP is worth. > > > > Now what if it were done with all the lower cost equipment (Mikrotik, > Ubiquiti) which is fine in many situations but we have all Cambium? We'd > have to replace it all to fit it into our system. In all honesty we'd > replace everything and probably take a couple years or more to get our > return on investment which is fine. But if someone is asking a great deal > more it isn't worth it. > > > > There are other factors such as strategic locations. IP space and all > the rest. However in our case we are already expanding in that direction > and thought this would be the quicker path. We'll spend about the same in > the next years putting up all new locations and equipment anyway. > > > > What is your opinion on the situation of someone who is asking way way > way more than what the market dictates? > >
Re: [AFMUG] Current Market Value
Can't say. I haven't heard anything good about them from customers but its possible. It is surprising that as long as they've been there they only have as many customers as they have. We generally grow at a much much higher pace even without advertising. But ultimately they are nice people to deal with. But I'm sure the fact we'll be providing much higher speeds and probably more reliable connections to their homes will be welcomed (no ups at their towers!) - Original Message - From: "Seth Mattinen" To: "af" Sent: Tuesday, February 14, 2017 12:45:44 PM Subject: Re: [AFMUG] Current Market Value On 2/14/17 09:37, Steve wrote: > What is your opinion on the situation of someone who is asking way way way > more than what the market dictates? What's their local reputation like? How much goodwill goes the business have? Or is a trash pile someone put together and is now trying to unload? Will being associated with their name and reputation hurt or help or have no impact to you? ~Seth
Re: [AFMUG] Current Market Value
I have always approached this question from a single point of view. What is it worth to you? Once you know the answer to that question it doesn't really matter what they are asking. You offer what you are comfortable with. If they don't like it, you were already planning to expand so continue with those plans. They may become more reasonable. On Tue, Feb 14, 2017, 11:47 AM Keefe John wrote: > I would look at a multiple of estimated post-acquisition EBITA. That's > what JAB does. > > > On 2/14/2017 11:37 AM, Steve wrote: > > What is the current market value for a WISP? > > > > I've posted this before years ago and it hasn't changed much from my > experience. Its always been 12-16 months of your average revenue per > customer (ARPU). It depends on the equipment and all the rest. We've sold > before and we know what others have sold for. SO we generally have a good > idea what a WISP is worth. > > > > Now what if it were done with all the lower cost equipment (Mikrotik, > Ubiquiti) which is fine in many situations but we have all Cambium? We'd > have to replace it all to fit it into our system. In all honesty we'd > replace everything and probably take a couple years or more to get our > return on investment which is fine. But if someone is asking a great deal > more it isn't worth it. > > > > There are other factors such as strategic locations. IP space and all > the rest. However in our case we are already expanding in that direction > and thought this would be the quicker path. We'll spend about the same in > the next years putting up all new locations and equipment anyway. > > > > What is your opinion on the situation of someone who is asking way way > way more than what the market dictates? > >
Re: [AFMUG] Current Market Value
I would look at a multiple of estimated post-acquisition EBITA. That's what JAB does. On 2/14/2017 11:37 AM, Steve wrote: What is the current market value for a WISP? I've posted this before years ago and it hasn't changed much from my experience. Its always been 12-16 months of your average revenue per customer (ARPU). It depends on the equipment and all the rest. We've sold before and we know what others have sold for. SO we generally have a good idea what a WISP is worth. Now what if it were done with all the lower cost equipment (Mikrotik, Ubiquiti) which is fine in many situations but we have all Cambium? We'd have to replace it all to fit it into our system. In all honesty we'd replace everything and probably take a couple years or more to get our return on investment which is fine. But if someone is asking a great deal more it isn't worth it. There are other factors such as strategic locations. IP space and all the rest. However in our case we are already expanding in that direction and thought this would be the quicker path. We'll spend about the same in the next years putting up all new locations and equipment anyway. What is your opinion on the situation of someone who is asking way way way more than what the market dictates?
Re: [AFMUG] Current Market Value
On 2/14/17 09:37, Steve wrote: What is your opinion on the situation of someone who is asking way way way more than what the market dictates? What's their local reputation like? How much goodwill goes the business have? Or is a trash pile someone put together and is now trying to unload? Will being associated with their name and reputation hurt or help or have no impact to you? ~Seth
Re: [AFMUG] Current Market Value
Last few successful sales i have seen boil down to one of two formulas. Formula 1 18 Months for residential 24 for commercial In this formula assets such as IP space were figured in. Formula 2 Customer asset purchase. 1.3-1.5X annual revenue. Other assets such as towers, Ip space were negotiated separately. Justin Wilson j...@mtin.net --- http://www.mtin.net Owner/CEO xISP Solutions- Consulting – Data Centers - Bandwidth http://www.midwest-ix.com COO/Chairman Internet Exchange - Peering - Distributed Fabric > On Feb 14, 2017, at 12:37 PM, Steve wrote: > > What is the current market value for a WISP? > > I've posted this before years ago and it hasn't changed much from my > experience. Its always been 12-16 months of your average revenue per customer > (ARPU). It depends on the equipment and all the rest. We've sold before and > we know what others have sold for. SO we generally have a good idea what a > WISP is worth. > > Now what if it were done with all the lower cost equipment (Mikrotik, > Ubiquiti) which is fine in many situations but we have all Cambium? We'd > have to replace it all to fit it into our system. In all honesty we'd replace > everything and probably take a couple years or more to get our return on > investment which is fine. But if someone is asking a great deal more it > isn't worth it. > > There are other factors such as strategic locations. IP space and all the > rest. However in our case we are already expanding in that direction and > thought this would be the quicker path. We'll spend about the same in the > next years putting up all new locations and equipment anyway. > > What is your opinion on the situation of someone who is asking way way way > more than what the market dictates? >
[AFMUG] Current Market Value
What is the current market value for a WISP? I've posted this before years ago and it hasn't changed much from my experience. Its always been 12-16 months of your average revenue per customer (ARPU). It depends on the equipment and all the rest. We've sold before and we know what others have sold for. SO we generally have a good idea what a WISP is worth. Now what if it were done with all the lower cost equipment (Mikrotik, Ubiquiti) which is fine in many situations but we have all Cambium? We'd have to replace it all to fit it into our system. In all honesty we'd replace everything and probably take a couple years or more to get our return on investment which is fine. But if someone is asking a great deal more it isn't worth it. There are other factors such as strategic locations. IP space and all the rest. However in our case we are already expanding in that direction and thought this would be the quicker path. We'll spend about the same in the next years putting up all new locations and equipment anyway. What is your opinion on the situation of someone who is asking way way way more than what the market dictates?