SCOTTSDALE, Arizona,
Dec. 6, 2016 /PRNewswire/ -- GoDaddy
Inc. (NYSE: GDDY), the world's largest cloud platform dedicated to
small, independent ventures, today announced it has entered into a
definitive agreement to acquire Host Europe Group (HEG) for €1.69
billion (US$1.79 billion), including
€605 million paid to the selling shareholders and €1.08 billion in
assumed net debt. The transaction has been approved by the GoDaddy
board of directors and HEG's shareholders and is expected to close
in the second quarter of 2017, subject to customary regulatory and
other closing requirements.
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HEG is currently owned by Cinven, one of Europe's leading private equity firms, which
acquired the business in August 2013.
GoDaddy intends to integrate the majority of HEG's business while
exploring strategic alternatives for HEG's PlusServer managed
hosting business, including a possible sale.
As the largest privately-owned web services provider in
Europe, HEG serves small
businesses and web experts, and has built a thriving business with
more than 1.7 million customers. With strong positions in the
UK and Germany, including brands
such as 123Reg, Domain Factory, Heart Internet and Host Europe, HEG
complements GoDaddy's leading position in the US and fast-growing
international footprint.
Combining GoDaddy's global technology platform with HEG's
footprint in Europe will enable
the rapid deployment of a broader range of products to customers
and allow for better scale of product development and go-to-market
investments across both companies. GoDaddy and HEG share a strong
cultural focus on the needs of small business customers, supporting
their product offerings with consultative customer care that drives
high customer retention.
"GoDaddy has successfully expanded its international business to
56 global markets over the past four years," said GoDaddy CEO
Blake Irving. "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."
"In combining with GoDaddy, we see a remarkable opportunity for
our customers, partners and the small business ecosystem in
Europe," said Patrick
Pulvermüller, Group CEO of HEG. "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. Together
GoDaddy and HEG will provide even more value for our customers and
introduce new solutions to help their ventures succeed."
Patrick Pulvermüller will lead the combined
company's European operations. He will report to Andrew
Low Ah Kee, GoDaddy's Executive Vice President
of International. GoDaddy's European team will report
into Pulvermüller.
HEG serves similar customers to GoDaddy's core customer base –
namely, small ventures and the web professionals who support them.
HEG has reported consistently strong top line and cash flow growth
and is on track to generate approximately US$328 million in bookings and approximately
US$139 million in adjusted EBITDA in
2016. The purchase price of €1.69 billion (US$1.79 billion), represents approximately 11x
HEG's 2016 estimated adjusted EBITDA including anticipated annual
synergies. Financing for the transaction has been committed by
existing lenders at interest rates similar to GoDaddy's existing
term loan.
HEG today includes the PlusServer brand which serves larger,
more mature companies that require a dedicated field sales force
and account management. PlusServer is a high-quality business with
a strong financial profile and world class management team. Because
its business model differs from GoDaddy, GoDaddy intends to explore
strategic alternatives for the PlusServer business, which is
expected to generate approximately US$92
million in bookings and US$41
million in adjusted EBITDA in 2016.
HEG also owns the World Hosting Day and NamesCon brands and
conferences, mainstays in the global website hosting and domain
communities. GoDaddy will continue to operate these brands
independently and invest in their continued growth.
HEG has offices in Germany, the
U.K., France, Spain, Romania, and Bulgaria.
GoDaddy does not provide reconciliations from non-GAAP
projections to GAAP, because these reconciliations are not possible
without unreasonable effort, and presentation of such
reconciliations would imply an inappropriate degree of
precision.
Conference Call and Webcast
GoDaddy will host a conference call and webcast to discuss the
acquisition at 8:00 am Eastern Time
on December 6, 2016. To hear the
call, dial (877) 201-0168 in the United
States or (647) 788-4901 from international locations, with
passcode 32516013. A live webcast of the call, together with a
slide presentation, will be available through GoDaddy's Investor
Relations website at https://investors.godaddy.net. Following the
call, a recorded replay of the webcast will be available on the
website.
GoDaddy Inc. uses its Investor Relations website at
https://investors.godaddy.net as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD. Accordingly, investors should
monitor GoDaddy's Investor Relations website, in addition to
following press releases, Securities and Exchange Commission (SEC)
filings, public conference calls and webcasts.
Forward-Looking Statements:
This press release contains forward-looking statements which are
subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements are
based on information and estimates available to us at the time of
this press release and are not guarantees of future
performance. Statements which may be considered
forward-looking within the meaning of the U.S. federal securities
laws include statements regarding the acquisition of Host Europe
Group, the time frame in which this will occur, the expected
benefits to GoDaddy from completing the acquisition, including
benefits to customers, introduction of new solutions and
acceleration of expansion into Europe; statements regarding the expected
future financial performance of Host Europe Group and the
PlusServer business. These statements are subject to known
and unknown risks, uncertainties and other factors that may cause
our actual results, performance or achievements to differ
materially from results expressed or implied in this press release.
Such risk factors include those related to: required regulatory
approvals and the satisfaction of other closing conditions, closing
of committed financing necessary to complete the acquisition; the
potential impact on the businesses of GoDaddy and Host Europe Group
due to uncertainties regarding the acquisition; the retention of
customers and employees of Host Europe Group and the ability of
GoDaddy to successfully integrate Host Europe Group and to achieve
expected benefits; general economic conditions; the timing and
market acceptance of new solutions and the degree to which these
solutions gain market acceptance. Actual results may differ
materially from those contained in the forward-looking statements
in this press release.
Additional risks and uncertainties that could affect GoDaddy's
financial results are included under the captions "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," in the Company's Annual Report on Form
10-K for the year ended December 31,
2015, as amended, which is available on the Company's
website at https://investors.godaddy.net and on the SEC's website
at www.sec.gov. Additional information will also be set forth in
other filings that the Company makes with the SEC from time to
time. All forward-looking statements in this press release are
based on information available to the Company as of the date
hereof. GoDaddy does not assume any obligation to update the
forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were
made.
About GoDaddy
GoDaddy powers the world's largest cloud platform dedicated to
small, independent ventures. With more than 14 million customers
worldwide and more than 63 million domain names under management,
GoDaddy is the place people come to name their idea, build a
professional website, attract customers and manage their work. Our
mission is to give our customers the tools, insights and the people
to transform their ideas and personal initiative into success. To
learn more about the company, visit www.GoDaddy.com.
About HEG
HEG is one of Europe's leading
web services providers, one of the largest domain registrars in the
UK and a leading provider of Managed Hosting in Germany. HEG has more than 1.7 million
customers with over 7 million domain names under management. HEG's
mission is to web enable business like no other. HEG knows that
that the companies that put the web at their heart are redefining
commercial success. HEG believes that every company can benefit
from harnessing the power of the internet, whoever they are and
whatever their needs. HEG's role in this transformation is to
enable all businesses to succeed online and focuses to empower its
customers to get the most out of the web; be that through its
products, its customer support or its 'how to guides'. To learn
more about the company, visit www.heg.com.
Source: GoDaddy Inc.
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