With more than 1.7 million customers and seven million domain names under management, HEG is among Europe’s biggest privately owned hosting companies and web service providers. It has a particularly strong presence in the U.K and Germany, though it also has offices in France, Spain, Romania, and Bulgaria. HEG was acquired by private equity firm Cinven in August 2013 for $668 million.
In terms of the of the GoDaddy transaction, €605 million ($650 million) will be paid to the selling shareholders, with the additional €1.08 billion ($1.16 billion) in assumed net debt. The transaction has already been approved by GoDaddy’s directors and HEG’s shareholders, but the deal still has to pass regulators, something that is expected to happen in Q2 2017.
Founded out of Arizona in 1997, GoDaddy is one of the world’s biggest registrars, with more than 60 million domain names under its wing. But it long ago expanded beyond being a simple registrar. It now offers a bookkeeping service, as a result of its 2012 acquisition of Outright, and it later snapped up Ronin to integrate invoicing into this service. And earlier this year, GoDaddy bought out cloud-based communications company FreedomVoice.
GoDaddy has been pushing to infiltrate the broader small-to-medium sized business market for some time, and HEG already serves a customer base similar to GoDaddy’s — small companies and web professionals.
Rumors of the HEG acquisition first surfaced back in November, but now that the deal is official, it’s clear GoDaddy is not only looking to push its customer count in Europe, but also to expand its presence in the web hosting realm. The company says that it plans to integrate “the majority of HEG’s business” while “exploring strategic alternatives” for HEG’s other interests, including its PlusServer managed hosting business, which GoDaddy has said it may sell to a third party.
“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.”
Today’s news comes three months after GoDaddy acquired ManageWP, a Serbian startup that lets users manage multiple WordPress websites from a single dashboard. GoDaddy later integrated the offering into a new Pro service for developers.