| 6:55 pm on Dec 22, 2004 (gmt 0)|
Fredrick cashes out! It is a bit of a stunner. We'd heard Iprospect was worth - and asking considerably (multiples) more than that over the last year. Some of the contract valuations that iProspect had, would lead one to assume it was worth significantly more.
| 7:00 pm on Dec 22, 2004 (gmt 0)|
$50 million for a company who outsources everything to another company who THEN outsources it again to 3rd party company seems pretty steep to me ;)
| 7:06 pm on Dec 22, 2004 (gmt 0)|
| 7:13 pm on Dec 22, 2004 (gmt 0)|
>outsources everything to another company
Damn, I wondered why I was so busy all the time...gotta start makin' my way up the food chain ;)
| 7:36 pm on Dec 22, 2004 (gmt 0)|
Shak, who do they outsource to? They were ranked as one of the best organic SEO firms around by Jupiter. I thought it was a matter of time before Fredrick would eventually cash out, since everybody and their brother has opened their own SEO agency.
| 8:03 pm on Dec 22, 2004 (gmt 0)|
When service companies are bought, they are valued partly on their client base, and partly on their process/proprietary knowledge.
When the process is proven effective, well-documented, and scaleable, that's when a agency like IProspect can command a premium.
So, if they've actually have been outsourcing (never heard that outside this thread, btw) that only means they've been able to apply their process in another setting. Which is exactly what a company like Aegis/Isobar pays for - the ability to spread SEO knowledge to their whole group.
| 8:08 pm on Dec 22, 2004 (gmt 0)|
fully appreciate your point dude and you are 100% right on the reason for purchases etc
btw, just looked at ur profile, saw ur in boston and own a company which handles outsourcing of seo for agencies ;)
| 1:09 am on Dec 23, 2004 (gmt 0)|
Never thought they outsourced, but operational details seem pretty closely guarded there.
Seems like 50M would be at most 2x annual revenues. They are also probably buying the agreements that tie people to iProspect and prevent that knowledge from leaving and working somewhere else for a while.
| 12:16 pm on Dec 23, 2004 (gmt 0)|
>>> When the process is proven effective, well-documented, and scaleable
But don't SEO concepts change every X months? Even if a SEO company has good process documentation, it is still a people-dependent enterprise
| 12:20 pm on Dec 23, 2004 (gmt 0)|
|Aegis will pay an initial £16.7m with a further £9.4m deferred and payable over two years, subject to performance-related targets. |
That is interesting. Usually in a buy out, the golden cherry is the final payment, not the first. This suggests to me that much of the £16.7 will be paying off various credit lines and debts.
| 12:30 pm on Dec 23, 2004 (gmt 0)|
By the way - doesn't anyone worry that a company (aegis PLC) who doesn't even seem to own their brandname as a domain in any regard is buying an SEO company?
| 1:55 am on Dec 24, 2004 (gmt 0)|
|This suggests to me that much of the £16.7 will be paying off various credit lines and debts. |
Seems like unless they spent cash on lots of cash haphazardly they should have had no need to have any debt. Margins for them should have been great.
| 5:48 am on Dec 24, 2004 (gmt 0)|
Shak plz explain yourself when you say that they outsource it to a 3rd party.