Anthony Advisors sees itself as a consultative advisor rather than a broker—in addition to buying and selling ISPs, the firm is more than happy to offer advice.

by Jeff Goldman [March 7, 2007]

Graham Anthony, president of Anthony Advisors, worked for Cheval Capital for a while before founding his own firm in 2001. Since that time, he says, Anthony Advisors has completed over 20 acquisitions and five divestitures.

While 2001 might not seem to have been the best time to have started an Internet-related firm, Anthony says it all worked out well. "I was very fortunate," he says. "I had a couple of good clients—the Allbritton family was nice enough to let me help them buy some hosting businesses, and EarthLink was kind enough to let me help them buy Winstar's assets—and we just grew from there."

Anthony Advisors Post Office Box 1464 Charlottesville, VA 229023 Voice: (434) 989-5800 mailto: info@aadvisors.com

Anthony says his firm strives to be as straightforward as possible with all potential clients. "We give them a very unvarnished approach," he says. "If we can help them, we'll suggest how we can help them. If we can't, we'll try and send them to someone who can."

The firm has brokered purchases of businesses from half a million dollars to over $50 million, and sales of business in the $1 to $5 million range. All transactions, Anthony says, include a retainer plus commission. "We like to know that the buyer or seller is serious, and we like to be able to commit sufficient resources to do the job for them," he says. "So we generally require a retainer, just to show that the client is truly interested."

A challenging process
While the firm used to be more focused on buying than selling, Anthony says that's changing. "I'm increasingly becoming interested in the sell side, simply because I think it's very hard to offer a seller at this moment enough money to make it worth their while to sell rather than just holding the asset—unless there's a strong delta in the cost structure between the acquirer and the seller," he says.

The point is that acquiring ISPs is currently a challenging process, Anthony says, since both buyer and seller are "trying to discount to the present the expected cash flows of either holding the business, or, for the folks that acquire the business, of acquiring the business. Where there's real opportunity is where the seller has a high cost structure and the buyer has a low cost structure—then there's an opportunity to create value for both parties."

Key factors that drive buyers' interest in an ISP, Anthony says, include geographic fit, rural versus urban location, price points, and the nature of the technology. Facilities-based businesses, he says, are harder to sell than those that ride on someone else's network. "Riding someone else's network is more attractive, simply because an acquirer won't have to maintain the expensive overhead," he says.

The firm's website explains the process involved in working with an ISP on both the buy side and the sell side—and in either process, Anthony says, his firm's expertise in the industry is a key differentiator. "We have a phenomenal amount of experience, and we bring, I would like to think, a fair amount of professionalism to the process," he says.

Choosing a broker
When looking for a broker, Anthony says it's important to look for a fit between your personality and the personality of the people you'll be working with—and if that fit isn't there, just move on. "We only try and transact business if we think we can deliver for that client in the way that client wishes to be delivered for," he says. "And if not, we send them to the people that we think would be a fit for them. There are several very good firms out there—Cheval Capital, Paul Stapleton and Anthony Advisors are the first three that come to mind."

Still, Anthony says he's willing to offer free advice to anyone who's looking for guidance. "We're very busy at the moment, and we have very limited bandwidth, so we're only going to be taking on projects that we think are a perfect fit for our skill set," he says. "That being said, I'm more than happy to talk to anyone and try and direct them—we'll give people our unvarnished opinion for free and try and send them in the right direction. And pretty quickly, we can put a price on what we think the market will pay for a firm. Owners may not like to hear that, but we have a pretty good feel from our seven years in the business as to what the market will pay for certain things. We're not oracular, but we can at least get in the ballpark—and then we can also help people take certain steps to improve the value of their firm over time."

—End