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What You Need to Know About Internet M&A
Internet M&A, or mergers and acquisitions, refers to the process of one internet-based company acquiring another internet-based company. As the internet has become an essential part of our daily routine, this kind of corporate restructuring has become more prevalent in recent years. If you’re interested in investing in technology companies or work in the technology industry, understanding the basics of Internet M&A is essential.
A company’s desire to gain a competitive edge by acquiring another company’s technology, intellectual property, or customer base often drives Internet M&A. A social media platform may, for example, acquire a photo-sharing app to expand its user base, whereas a search engine may acquire a mapping app to enhance its services. A company’s desire to diversify its portfolio or enter a new market may also drive Internet M&A.
Internet M&A can take many different forms, such as asset acquisitions, stock acquisitions, and mergers. An asset acquisition is when a company purchases specific assets, such as patents or technology, from another company. In a stock acquisition, a company purchases a controlling interest in another company by buying its outstanding shares of stock. A new company is formed when two companies merge.
While M&A is common in many industries, it’s particularly prevalent in the tech industry, which includes internet-based companies. In fact, internet M&A activity has been increasing in recent years, with numerous high-profile deals making headlines.
The Cheval M&A deal is one of the most noteworthy internet M&A transactions in recent years. The transaction involved the sale of a large IPv4 block to an undisclosed buyer, facilitated by Virginia-based investment bank Cheval Capital. The sale price of over $40 million made it one of the most significant internet M&A deals in history. Hillary Stiff, the President of Cheval Capital, and Frank Stiff, the managing director of Cheval Capital were responsible for the transaction. Hillary Stiff is a well-known figure in the tech industry, particularly in the area of internet M&A. She has worked on several high-profile deals throughout her career, making her one of the most sought-after experts in the field.
One area of internet-related business that is particularly active in the M&A space is hosting. Hosting M&A refers to the business of providing server space and other related services that allow websites and other online content to be accessible on the internet. Due to the high demand for Hosting M&A services and the competitive nature of the industry, hosting companies often seek to grow their market share through acquisitions.
A shortage of available IPv4 blocks is another factor driving internet M&A. IPv4 is the fourth generation of the internet protocol and assigns unique identifiers to internet-enabled devices. As the internet has expanded at an unprecedented pace, the number of available IPv4 blocks has dwindled, leading to a scarcity that increases the value of existing blocks and encourages companies to acquire them through M&A.
To sum up, Internet M&A is a constantly evolving and intricate realm of business that is shaped by numerous factors, including the pursuit of market share expansion, the scarcity of IPv4 blocks, and the requirement for regulatory compliance and intellectual property protection. For entrepreneurs, investors, and others interested in the technology industry, comprehending these factors is essential for making informed decisions about their investments and strategies.
