GoDaddy Inc. (GDDY) will acquire Host Europe Group (HEG) in a $1.82 billion (1.69 billion euros) deal, according to the company’s announcement on Tuesday. The domain name provider will acquire HEG’s debt, too.
GoDaddy’s acquisition is strategic and will allow the company to further expand into the web hosting industry.
Hosting websites is more lucrative than domain registration. GoDaddy aims to accelerate the company’s shift into web hosting in Europe with the acquisition of Host Europe. GoDaddy’s Chief Executive Blake Irving states the deal will give the company a five-year start in the European market.
HEG operates numerous brands, including Host Europe, Domain Factory, Heart Internet and 123Reg. The entity is one of the largest web hosts in Europe run independently.
The company was acquired by Cinven Ltd. (CINV) for $667 million in August 2013. The equity firm’s progress with HEG helped ignite the acquisition. GoDaddy considered buying HEG at the time, but the company was concerned with integration issues.
The company is said to be open to sale discussions of the company’s PlusServer managed hosting business.
HEG is reported to be on track to post $328 million in bookings this year. HEG’s chief executive, Patrick Pulvermuller, will lead the combined company’s operations in Europe.
HEG has seven million domain names under management along with 1.7 million customers. Terms of the deal will include $650 million paid to the selling shareholders. The remaining $1.16 billion is in assumed debt.
GoDaddy’s directors and HEG shareholders both approved the deal.
The acquisition will need to pass through regulators before it’s finalized. The companies expect the deal to be final in the second-quarter of 2017. GoDaddy has shifted the company’s offerings to small-to-medium sized businesses.
Rumors of the acquisition surfaced in November, but the deal’s official announcement was not made until Tuesday. GoDaddy announced that the majority of HEG’s business will be integrated into GoDaddy’s current set of products and services.
