GoDaddy to buy peer Host Europe Group from Cinven for €1.69 bn

GoDaddy Inc, a US-based Internet domain registrar and web hosting company, yesterday struck a deal to buy peer Host Europe Group (HEG) from private equity firm Cinven for €1.69 billion ($1.82 billion), including debt.

The acquisition, which includes debt of €1.08 billion, has been approved by the board of GoDaddy and HEG's shareholders and is expected to close in the second quarter of 2017.

GoDaddy said that it plans to integrate the majority of HEG's business while exploring strategic alternatives for HEG's PlusServer managed hosting business, including a possible sale.
HEG, one of Europe's largest independent web hosting firms, was earlier put up for sale by Cinven, but the process was put on hold following the UK's June vote to leave the European Union.

The company, which is registered in the UK and has a large customer base in Germany, had received interest from German Internet service provider United Internet AG and Deutsche Telekom AG prior to the Brexit vote.

GoDaddy, backed by private equity firms KKR and Silver Lake, had outbid rival like United Internet, which had teamed up with private equity firm Warburg Pincus, and buyout firm Centerbridge, while Deutsche Telekom last month withdrew from the bidding process, Reuters had earlier reported. (See: GoDaddy in exclusive talks to buy peer Host Europe Group)

HEG, which was acquired by Cinven in 2013 for £438 million, has 1.7 million customers and control over nine data centers in the US and Europe.

With strong positions in the UK and Germany, including brands such as 123Reg, Domain Factory, Heart Internet and Host Europe, HEG will complement GoDaddy's leading position in the US.

GoDaddy said that by merging its global technology platform with HEG's footprint in Europe will enable it to rapidly deploy a broader range of products to customers and allow for better scale of product development and go-to-market investments across both companies.

"GoDaddy has successfully expanded its international business to 56 global markets over the past four years," said GoDaddy CEO, Blake Irving. "By joining forces with HEG, we accelerate our expansion into Europe with the delivery of a broader range of cloud-based products, built on a single global technology platform, and supported by unparalleled customer care to help small businesses and web designers succeed online."

"In combining with GoDaddy, we see a remarkable opportunity for our customers, partners and the small business ecosystem in Europe," said Patrick Pulvermüller, group CEO of HEG. "What stands out is the strategic alignment of the companies – we're both driven to empower people to transform their ideas and bring them to life online."

Arizona-based GoDaddy is the world's largest website hosting services provider with more than 61 million domain names under management.