GoDaddy Expands Into Europe With $1.8B Deal

The acquisition of Host Europe Group aligns GoDaddy with a company that also targets small businesses and the web professionals who support them.
Matthew HellerDecember 6, 2016
GoDaddy Expands Into Europe With $1.8B Deal

Web hosting giant GoDaddy has agreed to acquire European rival Host Europe Group for $1.8 billion in a move to accelerate its international expansion.

HEG is one of Europe’s largest independent web hosting firms, operating brands such as 123Reg, Domain Factory, Heart Internet, and Host Europe. It has 1.7 million customers, with more than 7 million domains under management.

GoDaddy, which has more than 14 million customers worldwide and more than 63 million domain names under management, will buy HEG from European private equity firm Cinven Ltd. It is the company’s largest-ever acquisition.

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“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,” GoDaddy CEO Blake Irving said in a news release.

GoDaddy has been expanding internationally, recently registering its one millionth domain in the U.K. For the last quarter, it reported $129.2 million in international revenue, which was up 21 percent year-over-year.

According to TechCrunch, the company prides itself on generating revenue outside of traditional streams like domain registration and hosting, offering additional services to small businesses such as search engine optimization, online marketing, and even online bookkeeping.

“If GoDaddy starts to offer these additional services to HEG’s customer base, they may have a shot at expanding both their revenue and presence in Europe much faster than originally planned,” TechCrunch said.

GoDaddy said HEG serves similar customers to its core customer base — namely, small ventures and the web professionals who support them. “They are completely aligned with what we are doing,” Irving said.

HEG was purchased by Cinven for about $678.9 million. It is on track in 2016 to generate approximately $328 million in bookings and $139 million in earnings excluding interest, taxes, depreciation and amortization, GoDaddy said.

“What stands out is the strategic alignment of the companies — we’re both driven to empower people to transform their ideas and bring them to life online,” HEG chief executive Patrick Pulvermüller said.