Godaddy Inc (NYSE:GDDY) and Deutsche Telekom In The Race To Acquire Germany’s Web Hosting Provider HEG

Godaddy Inc (NYSE:GDDY) and Deutsche Telekom are among the companies interested in acquiring German web hosting firm Host Europe Group (HEG). The other top bidder for HEG is United Internet. The bidders have until October 10 to make their proposals.

HEG could end up costing the buyer $2 billion including debt assumption. The web host provider that has been put on the sale block by private equity firm Cinven was recently valued at $1.7 billion. Given that HEG is a strategic asset for web hosting companies trying to expand in Europe, it could command a premium offer because of rival bids.

However, it is not currently clear how GoDaddy and Deutsche have valued the company in their bid offers.

HEG is one of the largest independent web hosting providers in Europe. Though Cinven had shown intent to sell HEG in the summer, the private equity firm slowed down the process as Brexit vote threw the Eurozone into economic volatility and making it difficult for companies such as HEG to attract sweet deals. Cinven only recently resumed the process of selling HEG and it wants to finish the business before Christmas.


GoDaddy and Deutsche line up financiers

As the race to acquire heats up ahead of the bid submission deadline next week, potential buyers are looking for partners to back them. Sources say that Deutsche has partnered with private equity firm Hellman & Friedman to acquire HEG. United Internet on its part is being boosted by buyout firm Warburg Pincus so that it can bring HEG under its armpit and expand in Europe’s web hosting market.

It seems GoDaddy Inc (NYSE:GDDY) hasn’t reached out to any outside financiers other than private equity funds Silver Lake and KKR that already back it. Getting hold of HEG would enable GoDaddy to gain scale in Europe’s web hosting industry.

Besides United Internet, GoDaddy and DeutscheOutside, other firms showing interest in acquiring HEG include Permira, EQT and Providence.

GoDaddy stock retreated 0.12% in the last session to close at $34.72.

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