GoDaddy has won the bidding to acquire Host Europe, for a total EUR 1.69 billion including EUR 1.08 billion in net debt. German operators Deutsche Telekom and United Internet were thought to be also considering the takeover.
The purchase from private equity group Cinven significantly expands the US-based web hosting company's presence in Europe, adding over 1.7 million customers. Host Europe is particularly strong in the small business market in the UK and Germany with brands such as 123Reg, Domain Factory, Heart Internet and Host Europe.
Host Europe's CEO Patrick Pulvermueller will remain with the company as head of GoDaddy's European operations, reporting to Andrew Low Ah Kee, GoDaddy's Executive Vice President of International.
Host Europe is expected to generate USD 328 million in bookings and USD 139 million in adjusted EBITDA in 2016. The purchase price is equal to around 11x its estimated adjusted EBITDA including anticipated synergies from the integration with GoDaddy.
GoDaddy said it will look at a possible sale of HEG's PlusServer managed hosting business, while expanding the range of products at the remaining business. PlusServer serves larger, more mature companies that require a dedicated field sales force and account management. Its expected to account for USD 92 million in bookings and USD 41 million in EBITDA this year. GoDaddy said that while PlusServer has a strong financial profile, its business model differs from that of GoDaddy.
