Deutsche Telekom has sold its shares in cloud service provider Strato to United Internet for approximately EUR 600 million. United Internet made the acquisition through its Business Applications holding structure, in which private equity firm Warburg Pincus also recently acquired a stake.
The first payment of EUR 566 million is to be made on completion of the transaction, which is expected in the first half of 2017. A further sum, up to EUR 34 million, will be payable upon completion of key performance milestones.
Strato provides Deutsche Telekom with hosting services for the MagentaCloud and United Internet intends to continue this, according to a statement from Deutsche Telekom. Deutsche Telekom end-customers should not be affected, it said.
Since Deutsche Telekom bought Strato for EUR 275 million in 2009, the company has grown in value. Over the last five years, its revenues have increased from EUR 90 million to an estimated EUR 127 million in 2016, while EBITDA has risen from EUR 30 million to EUR 49 million. Based in Berlin, Strato employs over 500 people, with operations mainly in Germany and the Netherlands and over 2 million customer contracts.
The purchase price paid by United Internet reflects an estimated 2016 EBITDA multiple of approximately 12.4 times.
The deal is still subject to approval from the German Federal Cartel Office.
