There are a lot of reasons to enter the US market if you are from Canada. The US is a big market. This week British Columbia based Hosting Nation acquired two US firms; Hosting With Us and Domains With Us – each out of Atchison, KS – looks like sister companies.
Although I usually don’t connect the words “Grass roots” and “International” in the same sentence the GM of Hosting Nation said, “We have put a lot of energy into grass roots marketing efforts, but it’s always been a part of our plan to expand internationally.”
Lets look at some potential reasons to do this deal:
Easy transportation: Vancouver BC to Kansas City, KS are probably better for frequent flyer miles than convenience. I don’t think it is that.
Exchange Rate: Since last July, the Canadian dollar has lost about 18% against the US dollar. I don’t think it is that.
Marketing: By being in both the US and Canada each group can provide “Off Shore” hosting, hmmm possibly.
It was a great deal: This is where I will stake my flag.
All companies involved in the deal are budget priced hosting companies. In checking out Alexa, it seems that Hosting With Us is a decent brand. And it may provide the synergies that Hosting Nation also highlighted in the press release. But my bet is that Hosting Nation got a good deal.
MARKETING – In my discussions with firms one of the topics recently has had to do with being “off shore”. There are many reasons for this; “offshore” backup, currency/economic considerations, privacy of data, marketing leverage, branding and possibly a separate network.
The one thing we are sure of is that Canada is cheap compared to 18 months ago. Buying Canada may be good timing.
More about Tom:
NCC – the Hosting Business Broker
About Tom Millitzer
I am an M&A guy. I sell Hosting Companies. I want you to fulfill your dreams. If you are building your company or exiting for success...I want help you grow rich.
I started NCC International in 1994, we represented our first hosting company in 1997. NCC has completed over 400 assignments. If you are considering buying or selling you need to know me. I do not bite.
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