Brad,
This is where I have to disagree with you... what type of CPE is much
more important for me than the backhaul used. As an example, if the CPE
is 802.11b and they have 1,000 customers, I have to visit 1,000
locations and upgrade every single customer. However, if they are using
Trango, Canopy or Alvarion and using 802.11b for backhaul (just for
fun), then I only have to replace 30 or 40 backhaul radios and all the
customers are set. Plus I have access to the tower locations 24 hours
per day, rather than when customers are available.
But I do agree, there are many, many factors involved in the value of a
business... but the revenue multiplier seems to be the "quickest" way to
determine a baseline.
Travis
Microserv
Brad Belton wrote:
I think in most cases I've seen they are referring to a multiple of yearly
revenue not monthly.
So your 12x monthly is equal to 1x yearly.
Determining a valuation of a company is rarely performed with only one
factor taken into account. Simply saying an operation is worth x times
yearly revenue is silly as there are too many variables to take into
consideration.
Is company "A" that generates $1M in annual revenue worth more or less than
company "B" that generates $500K in annual revenue? Nobody can answer that
question until each company is thoroughly evaluated and even then it will be
unlikely two independent parties will arrive at the same number.
Regarding the equipment used, I believe a network built with carrier grade
equipment will always be worth more than an Alvarion or similar "best
effort" network. Backhaul infrastructure is far more important in the
evaluation of network value than the CPE. CPE only continues to drop in
price and therefore will only continue to drop in importance in the overall
valuation of a network.
The rollups with large money won't be looking at CPE equipment as a deciding
factor because they will ultimately be replacing all CPE with their own
proprietary gear probably a licensed product. Instead they will be looking
at real estate assets, client base, contractual agreements and most
importantly PROFITS just to name a few key sticking points.
Best,
Brad
-----Original Message-----
From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On
Behalf Of Travis Johnson
Sent: Sunday, December 03, 2006 4:00 PM
To: [EMAIL PROTECTED]; WISPA General List
Subject: Re: [WISPA] Network Valuation Considerations
So you are saying you haven't seen more than 2.5X the monthly revenue?
We sold a division of our company for 12X the monthly revenue + the FMV
of the equipment in 2001. The current going rate that I have seen is
more around 12X monthly + equipment infrastructure.
Travis
Microserv
Peter R. wrote:
Tom DeReggi wrote:
Nobody in unlicensed is going to get 6X
Thats where you are wrong. However, the value of a higher Multiple
is relevent to the amount of customers one has and what stage of
development the company is in.
Nope. No one is currently paying 6X. Most I have seen is 2.5X.
Companies shopping come to me all the time to make connections.
And I have not seen any pay more than 2.5x. And we are talking MRC not
annual.
Who pays for annual???
If I gave you 6x annual, I wouldn't make money for 7 years or more.
Even at 2.5x MRC, I don't see any pay out for 5 months. 2.5 to pay you
; 2.5 to right the balance sheet.
Oh, let me add that you can get 6X in STOCK!
- Peter
RAD-INFO, Inc.
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