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GoDaddy to Acquire Rival Host Europe Group for $1.7 Billion
, / 2007 0

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 companiesโ€™ internet-services business will help GoDaddy accelerate its international expansion. The Arizona-based domain name provider will pay $641 million to HEGโ€™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 Europeโ€™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

โ€œGoDaddy has successfully expanded its international business to 56 global markets over the past four years,โ€ explained GoDaddy CEO Blake Irving, in a press release. โ€œHEG 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 โ€“ 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 โ€“ Host Europe Group acquisition has been approved by GoDaddyโ€™s directors and HEGโ€™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 worldโ€™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 โ€“ web professionals and small companies.

GoDaddyโ€™s revenue rose 15% to $472.1 million in the third quarter. It operates in Europe and the U.K., but itโ€™s slowly matching HEGโ€™s presence in those countries.

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