As a buyer of WordPress hosting companies, I’ve been all across the web searching for markets where I can find sellers. This has allowed me to get a good sense of the options available for selling a website hosting business, too, and I thought I would share some of those here.
Obviously there are a number of reasons why someone would want to sell their hosting business. In my experience, usually it’s because the owner is getting older and is interested in doing other things with their time or simply retiring.
It’s also possible you are working on a new opportunity and are simply looking to free up your time to focus on that.
Regardless, there are a number of options that I’ve found where website hosting companies can be bought or sold.
They can vary quite a bit, and your needs are obviously going to be unique. The main factors that will come into play are:
- How big is your website hosting company?
If your company is pulling in $50,000/year in revenue, your options are going to look very different than if you’re doing $2M/year or $20M/year. There are different markets and options depending on your specific financial outlook. - Do you want to work closely with the buyer during the transition or simply transfer ownership quickly?
- Is the entire business – including website and branding – for sale, or simply the hosting clients?
- How much are you hoping to make in the sale?
Depending on the answers to these questions, one of the following options should hopefully work for you. Below, I will outline the pros and cons of each.
Options for Selling a WordPress Website Hosting Business
- A specialized business broker such as thehostbroker.com
I’ve been following The Host Broker for many years. They are the main market for buying and selling website hosting companies that I’ve found.
They are the other half of The MSP Broker, which sells managed services IT companies. It seems to me that they do a lot more business in that space, but there are still some good options that come through here.
As a seller, I imagine that you’ll be put in front of the eyes of countless hungry buyers, which is great.
The advantages of working with The Host Broker are that they will work closely with you to price your business and guide you through the whole process. As business brokers, they should have an understanding of the process and make things a bit easier for you.
There are a few downsides. First, you obviously have to pay them a large fee for their services. I’m not an expert in this area, but I imagine you will pay (or the buyer will pay) something like 10% of the sale price. Regardless of who pays, it will theoretically come out of your pocket.
Additionally, The Host Broker does not list businesses that do less than $30,000/year in revenue. If you are a very small host, they will not list you. Read on to find out your options in that case.
As stated on their website, the base price for selling a website hosting company is 1x annual recurring revenue for the services you are selling. Note that, theoretically, this does not include their fees, so you may be looking more at 0.9x annual recurring revenue.
2. Generic business selling platform like Flippa.com or acquire.com
Flippa is a massive business marketplace focusing mostly on online service companies. I would argue that the vast majority of the businesses they have for sale are blog, referral sites, and questionable e-commerce sites.
However, there are also quite a few tech-related sites and even some website-hosting companies.
In my experience, the businesses they sell tend to be more of “commodities”. For example, the website hosts I’ve seen there are always straightforward cPanel hosts usually providing services at bargain prices and typically not located in the US.
If you provide managed hosting services or take a more hands-on approach to what you provide, it’s pretty unlikely you are going to get a good deal for your company here. Additionally, they will generally prefer that you sell the entire business, including the website and brand.
The advantages are that they will likely accept any size business and you are put in front of a huge market of potential buyers.
However, I generally wouldn’t recommend this type of option unless your business essentially runs itself and provides a very generic service. Otherwise, you aren’t going to get a great deal.
Conversely, acquire.com tends to be more focused on startups, particularly SaaS businesses. At the time of this writing, it is a much smaller but more-focused marketplace.
It seems like the opportunities are much more legitimate than at Flippa, however I’m not sure they have a great deal of hosting companies listed at any given time.
3. Local business broker like Opportunities in Business
In this case Opportunities in Business happens to be my local Business Broker in Minneapolis, Minnesota (and also a longtime client), but you likely will have similar businesses in your city.
This type of business works closely with both buyers and sellers to ensure that the opportunity is brought in front of the right people and that the sale is a good fit for all parties.
What they bring to the table is years of experience buying and selling small businesses and they typically know the local market well.
Additionally, they are likely to work with you regardless of the size of your business.
The main downsides would be that they may or may not have experience working specifically with website hosting companies and they obviously charge a fee for their services just like The Host Broker does.
They will help you set up your business so that you can gain the best price for it, which may counteract their fees. Often it just takes a little tweaking to make your website hosting attractive to a potential buyer.
4. Directly with potential buyers, like us!
If you want to reap the greatest return on the sale of your hosting business and you also want to cut out some of the middle-men, your best option may be to work directly with potential buyers.
In our case, we have experience buying a couple other small website hosting providers and all parties have had a great experience. We know what the process looks like, we can put together an agreement that works with both parties, and we’re flexible in all areas.
You also get the comfort of knowing that you are working directly with the buyer and can get a sense of who will be taking care of your clients once the deal is done and you’ll know that they are in good hands.
It’s also likely you’ll get a better rate. We’ve generally paid more than 1x recurring annual revenue with no additional fees, which would be difficult to find elsewhere.
If you’d like to hear more about the types of WordPress hosting companies we’re looking to buy, click here.
The main advantages of working directly with a buyer are:
- Potentially higher rate and with no broker fees
- Direct communication with those will be working with your clients in the future
- No middle-men
- Flexible agreement terms
Of course, you’ll want to vet your buyer. Since you’re not working with a broker, you’ll need to do your due diligence to make sure that they will take care of your clients, give you a good rate, faithfully execute their end of the agreement.
If they’ve acquired other hosting businesses in the past without issue, that’s certainly a good sign.
And there you have it! A handful of options for selling your website hosting company.
There are obviously more options out there, but these are the main categories I’ve seen. Good luck!
