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GoDaddy to Acquire Rival Host Europe Group for $1.7 Billion

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GoDaddy just announced its heftiest acquisition, a deal to acquire rival Host Europe Group for $1.7 billion, including debt, as it looks to expand beyond the initial set-up of websites.

GoDaddy Host Europe Group Acquisition

Combined the two companies’ internet-services business will help GoDaddy accelerate its international expansion. The Arizona-based domain name provider will pay $641 million to HEG’s owner, private-equity firm Cinven, with the additional assumed net debt of $1.16 billion.

With more than 1.7 million customers and seven million domain names under its kitty, HEG is among Europe’s biggest privately owned hosting companies and web service providers. It operates under brands such as Heart Internet, 123Reg, Host Europe, and Domain Factory.

godaddy Host Europe Group

“GoDaddy has successfully expanded its international business to 56 global markets over the past four years,” explained GoDaddy CEO Blake Irving, in a press release. “HEG has built an impressive business that generates strong top-line growth, high margins, and industry-leading customer satisfaction. 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.

HEG has a strong presence in U.K and Germany, and has offices in France, Spain, Romania, and Bulgaria. In 2013, private equity firm Cinven acquired Host Europe Group for $668 million.

GoDaddy – Host Europe Group Deal

As per the terms of the GoDaddy Host Europe Group Deal, $650 million will be paid to selling shareholders, along with an additional $1.16 million in assumed net debt.

The GoDaddy – Host Europe Group acquisition has been approved by GoDaddy’s directors and HEG’s shareholders. However, it is yet to gain regulatory approval and is likely to happen in Q2 2017.

Founded in 1997, GoDaddy is one of the world’s biggest internet domain registrars, with more than 60 million domain names under its management. Long ago, it expanded beyond domain registration to bookingkeeping services, as a result of its 2012 acquisition of Outright, and it later acquired Ronin to integrate invoicing into this service.

Earlier this year, it GoDaddy acquired FreedomVoice, a cloud-based communications company. For long, GoDaddy has been pushing to integrate small-to-medium sized business market. With the GoDaddy Host Europe Group acquisition, it can now serve a small customer base – web professionals and small companies.

GoDaddy’s revenue rose 15% to $472.1 million in the third quarter. It operates in Europe and the U.K., but it’s slowly matching HEG’s presence in those countries.

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