Managed WordPress Hosting & Website Support Agency, 24-Year History

$812K

Revenue

$537K

SDE

3.9x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a 24-year-old managed hosting and website support agency founded in 2002 that keeps small and medium-sized businesses online. The core offering is managed WordPress hosting, supplemented by Treepl and eCommerce hosting, plus a wrap of essential services: website maintenance, technical support, domain registration, SSL, DNS and email management, security, backups, and ongoing updates. With roughly 600 hosted websites and 95% retention, this is the kind of infrastructure business that customers barely think about until something breaks, which is exactly why they keep paying.

The economics are steady rather than spectacular. Average revenue per customer runs about $880 per year (roughly $73 per month), producing $811,882 in top-line revenue and $537,072 in cash flow, a very healthy 66% margin driven by low headcount and a remote, systems-driven operating model. Most customers pay month-to-month, some annually, and ad-hoc website updates billed at $150 per hour throw off incremental revenue without a dedicated project team. Roughly 70% of revenue is recurring.

What makes this notable for an acquirer is the combination of long tenure, no client concentration, low owner involvement, and SBA pre-qualification. A qualified buyer can put 10% down and finance the rest over 10 years, meaning the cash flow comfortably services the debt while leaving room for a salary and reinvestment. This is a boring, sticky, cash-generative book of business, the type that compounds quietly if you leave it alone and grows faster if you actually work it.

Why we like it

Earnings quality is strong: $537,072 of cash flow on $811,882 of revenue is a 66% margin, and roughly 70% of that revenue recurs through monthly and annual hosting plans. With 600 accounts and no client concentration, no single customer can blow up the P&L, which is the profile SBA lenders love and why this deal is pre-qualified.
The moat is switching cost and inertia. Migrating a live website, domain, DNS, SSL, and email to a new host is a genuine hassle that most small business owners will pay to avoid, which shows up directly in the 95% retention rate. After 24 years, the customer book has been battle-tested through multiple recessions and platform shifts.
Managed hosting for SMBs is recession-resistant demand. A business will cancel a lot of things before it lets its website and email go dark, so this is closer to a utility bill than a discretionary expense. That durability is what lets you underwrite the 10-year SBA note with confidence.
The operator advantage is real: low owner involvement, a remote structure, and established systems mean you inherit a machine, not a job. A buyer who understands basic digital marketing or has an existing agency can bolt these 600 relationships onto a larger platform and cross-sell without adding much overhead.

How to improve it

Push the base toward annual prepay. Most customers pay month-to-month, so introduce a modest discount (one or two months free) for annual billing to lock in cash upfront, reduce churn, and improve working capital immediately.
Raise prices on the tail of underpriced accounts. At $73 per month average, many long-tenured customers are almost certainly below current market rates for managed WordPress hosting. A 10% to 15% increase on legacy plans, phased in over renewal cycles, drops nearly straight to cash flow given the 95% retention.
Systematize and expand the $150 per hour website update work. This is high-margin ad-hoc revenue today; package it into monthly maintenance retainers or care plans so it becomes recurring rather than reactive, smoothing revenue and increasing per-customer value.
Add tiered security and performance upsells. Bundle premium backups, malware remediation, CDN, and uptime monitoring into good/better/best plans. Existing customers already trust you with their site, so attach rate on these add-ons should be high with minimal acquisition cost.
Build a referral and reactivation engine. With 24 years of relationships and no formal sales function, a simple referral incentive plus a win-back campaign to churned accounts can add net-new logos cheaply. Track cost per acquisition so you know the true unit economics before spending.
Consolidate infrastructure costs. Review the third-party service providers and hosting stack for margin leakage; renegotiating vendor terms or right-sizing server capacity across 600 sites can meaningfully lift an already strong 66% margin.
Layer in complementary SMB services. Domain, SSL, and email are already sold; adding managed email marketing, basic SEO, or Google Business Profile management turns a hosting vendor into a fuller SMB digital partner and increases revenue per customer above the current $880 per year.

Diligence notes

Verify the recurring revenue split and churn math. Confirm the 70% recurring figure and 95% retention against the billing system, and separate true subscription MRR from the variable $150 per hour update work, which is not contractually recurring. Pull a cohort analysis to see whether retention is stable or slowly bleeding.
Scrutinize the concentration claim by revenue, not logo count. No client concentration across 600 accounts is reassuring, but confirm the top 10 or 20 accounts by dollars are not disproportionately large. Also check platform concentration risk given the heavy reliance on WordPress and specific third-party hosting infrastructure.
Understand the true owner workload and the technical bench. Low owner involvement is claimed, but identify who actually handles migrations, security incidents, and support tickets. If the operation depends on one or two key technical contractors or providers, quantify that dependency and the cost to replace it before closing.
Confirm the infrastructure and vendor contracts transfer cleanly. Managed hosting sits on top of underlying providers; verify server agreements, domain registrar relationships, SSL vendors, and any reseller arrangements assign to a new owner without repricing. Any unfavorable change on renewal could compress the 66% margin.
Validate the SBA pre-qualification terms and location. Confirm the 10% down, 10-year structure with an actual lender, and clarify the unknown location for licensing, tax, and buyer eligibility. Reconcile the stated cash flow to tax returns and bank statements since SBA underwriting will require clean, verifiable financials.

Source

Originally listed on BizBuySell. View original listing →