M&A analysis

Private Equity

Private Equity investors have been at the forefront of the consolidation trend within the industry across Europe. In recent years a number of PE groups have built up significant buy-and-build operations.

Among the most active has been the Host Europe Group (see below) which has been subject to a number of buyouts. Another prominent PE player is HgCapital which over the past year has acquired Zitcom and ScanNet in Denmark. The Danish hosting market is particularly fast-growing, benefiting from very high broadband penetration and a thriving e-commerce market.

Future deals

Market-watchers expect strong M&A activity among PE groups this year as the market continues to thrive. The UK sector is seen as a particularly hot market as, behind the US, it has one of the most advanced hosting industries in the world.

Trade activity

Strategic purchasers have also been attracted to the strong expansion potential in the hosting market and buyers are emerging from a variety of backgrounds.

IT solutions providers have been developing their web hosting businesses and looking for acquisition opportunities in order to achieve economies of scale, diversify their offerings and support their international expansion.

Telecoms players are also developing their web hosting services through acquisitions, and actively participating in the wider consolidation drive throughout the hosting industry. For instance, Orange recently acquired Cloudwatt, a move which strengthens its enterprise cloud services offering.

Host Europe

The German Host Europe Group has been one of the standout successes of the hosting industry, playing a big part in encouraging further PE investment in the sector. Its brands today include 123reg, WebFusion and DomainFactory.

Host Europe, which was previously known as GX Networks, was first acquired in 2008 by Oakley Capital, then by Montagu Private Equity in 2011, and most recently by Cinven in a tertiary buyout worth ¤555m in 2013.

Through a mixture of organic growth and a buy-and-build strategy, the company claims to be Europe’s largest privately owned hosting provider with data centre facilities across Europe and the US.

Over the past year the business has gone on to acquire Paragon Internet in the UK, and Intergenia in Germany, adding to its previous acquisitions of Telefonica Germany Online Services and DomainFactory.

Hosting Clearthought – M&A analysis Image

A selection of recent European M&A transactions

Date Target Country Acquirer EV €m
Jun 16 IT Relation Denmark Adelis Equity Partners n.a.
Jun 16 Onyx Group Ltd UK Pulsant n.a.
Apr 16 MCS Moorbek Computer GmbH Germany PlusServer GmbH n.a.
Apr 16 Carrenza Ltd UK Six Degrees Technology Group Limited n.a.
Mar 16 Netic A/S Denmark Trifork A/S n.a.
Feb 16 SystemHosting A/S Denmark Colombus A/S n.a.
Jan 16 NBS System Ltd France Oceanet Technology SAS n.a.
Dec 15 Aspaway France Claranet Ltd n.a.
Dec 15 Zitcom A/S Denmark HgCapital n.a.
Dec 15 A/S Scan Net Denmark HgCapital n.a.
Dec 15 United Communications Ltd UK Iomart Group Plc 16
Nov 15 Paragon Internet Group UK Host Europe Group n.a.
Nov 15 COLT Group S.A. (Managed Cloud business) UK Aurelius AG n.a.
Jul 15 RedeVF Lda. Portugal Claranet Ltd n.a.
Jul 15 home.pl.sp z oo Poland 1&1 Internet AG 122
Jun 15 Intelligent Group (50%) Belgium Waterland Private Equity Investments B.V. n.a.
Jun 15 T26 A/S Denmark GlobalConnect n.a.
May 15 Itconic S.A. Spain The Carlyle Group n.a.
Apr 15 One.com Denmark Accel KKR n.a.
Mar 15 Cloudwatt SAS France Orange S.A. n.a.
Dec 14 Intergenia Holding GmbH Germany Host Europe Group 166
Nov 14 Ecritel SARL France Isatis Capital/NextStage n.a.
Sep 14 Versatel AG (74.9% stake) Germany United Internet AG 947
Jul 14 ASP4all Hosting B.V. Netherlands Vitruvian Partners n.a.
Jul 14 Mainlab GmbH Germany Host Europe Group n.a.
Jun 14 Pulsant Ltd UK Oak Hill Capital 250
Jun 14 Ikoula (20% minority stake) France Ardian Group n.a.
Apr 14 TDC OY Finland DNA Ltd 154
Jan 14 ControlCircle UK Alternative Networks Plc 48