Afrihost valued at R1 billion by MTN: sources

TelkomUseless said:
A billion sound way too much....
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That was what I initially thought as well, but at just over 2 x revenue it is not that much. It may be a high PE, but Afrihost is well positioned for growth, and has a tremendous amount of good will.
 
rpm said:
That was what I initially thought as well, but at just over 2 x revenue it is not that much. It may be a high PE, but Afrihost is well positioned for growth, and has a tremendous amount of good will.
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which is being eroded atm...
 
rpm said:
That was what I initially thought as well, but at just over 2 x revenue it is not that much. It may be a high PE, but Afrihost is well positioned for growth, and has a tremendous amount of good will.
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+1.
And to think about where they were a few years ago, they're doing quite well for themselves now.
 
rpm said:
That was what I initially thought as well, but at just over 2 x revenue it is not that much. It may be a high PE, but Afrihost is well positioned for growth, and has a tremendous amount of good will.
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I don't know the details, but south Africa's market for Internet is only so big. We have major players (IS, Telkom, MTN,VC,CellC ) etc which take a huge chunk of the market, I can't see how Afrihost is worth that much. They might have huge amount of customers, but with pressure being huge in the ISP market, their mark-up can't be more than 10%?...

But I'll give it to Afrihost, they were clever. Get as many customers as possible (cheap prices) and then sell asap...

About the good will. I was a client (my family members too), and moved away from them when they moved to mtn. Their speeds are bad (uncapped) when a co-worker signed up 2 months ago. He cancelled with them...
 
froot said:
And to think about where they were a few years ago, they're doing quite well for themselves now.
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They grew their revenue from R14 million to R400 million in four years. A true success story.

"In the past five years the company’s turnover has jumped from R14 million in 2009 to an expected R400 million at the end of the 2013 financial year. “But we know the ADSL market in South Africa is made up of only 800 000 subscribers,” says Visser. The market, which now comprises three quarters of Afrihost’s revenue, is constrained by the fact that ADSL subscribers need to have a fixed telephone line, which means having a permanent residence."

More here: http://www.entrepreneurmag.co.za/ad...keting-sin-revenue-and-big-hairy-scary-balls/
 
YingYang said:
I also think its way too much :wtf:
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Why? Afrihost isn't a asset value business but rather revenue driven. If you value it using EBIDA or NPAT, this is a multiple of 2.5.
I've seen worse companies being valued using a multiple of up to 18 - so quite conservative really.
 
Sinbad said:
which is being eroded atm...
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Just like everybody said when they moved from IS to MTN data, I remember a lot of "omg I'm jumping ship..." - and look, we're all still here (and some of us back) at Afrihost. Just saying "omg the world is ending" seems to happen a LOT on these forums lately.
 
iBite said:
Just like everybody said when they moved from IS to MTN data, I remember a lot of "omg I'm jumping ship..." - and look, we're all still here (and some of us back) at Afrihost. Just saying "omg the world is ending" seems to happen a LOT on these forums lately.
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Are you an uncapped home user?
 
I will give credit where it is due...Afrihost CEO has done his best to supply cheaper(er) internet to all.Now with MTN on board ,more checks and balances and less flexibility surely? I am an afrihost client and they have good service but jeez their authentication issues of late have been shocking and wow school holidays their uncapped home product goes to the dogs.

If MTN over paid...time will tell but often big corporates do....think Old mutual,Investec and some deals,Hp and automy and many car deals , IT .
 
iBite said:
Just like everybody said when they moved from IS to MTN data, I remember a lot of "omg I'm jumping ship..." - and look, we're all still here (and some of us back) at Afrihost. Just saying "omg the world is ending" seems to happen a LOT on these forums lately.
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I haven't missed their uncapped one tiny bit since they moved to mtn, and still don't regret leaving one bit. All this shows is that there are a lot of people out there that don't know what quality bandwidth is.
 
Speculation further suggests that MTN wanted to buy 100% of Afrihost, but the directors refused
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All I see is greed in MTN, am sure they intended to bring about the Mtn culture of maximizing profits if they had obtained 100% stake
 
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