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.
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.
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.
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.
A selection of recent European M&A transactions
|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|