GoDaddy has beaten out the competition to buy Host Europe Group for $1.8bn

Billy Bambrough
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GoDaddy sponsored Nascar racing in the US until April last year
GoDaddy sponsored Nascar racing in the US until April last year (Source: Getty)

Website domain name provider GoDaddy is buying rival Host Europe Group (HEG) for €1.69bn (£1.42bn) including debt.

The move is designed to help accelerate GoDaddy’s international expansion and grow its services beyond the initial set-up of websites.

Host Europe is currently owned by private-equity firm Cinven, which picked up the business in August 2013, and has a debt pile of about of €1.08bn. It's understood that a number of telecoms and private equity firms had been interested in Host Europe before dropping out of the bidding.

GoDaddy has become infamous in the US for its outrageous TV adverts that often court controversy.

Scroll down for GoDaddy's 'best of' reel

It caught flak last year for an ad in which it suggested a dog had been intentionally abandoned by its owner, and suggesting a web domain and website for where it could be sold.

GoDaddy chief executive Blake Irving said:

GoDaddy has successfully expanded its international business to 56 global markets over the past four years.

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 a statement GoDaddy said it is looking into options for Host Europe's PlusServer managed hosting business, including a possible sale.

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Bankers had valued Host Europe at around £1.6bn to £1.7bn, after it posted a 45 per cent increase in underlying profits to £95m last year. Earnings are forecast to rise to £140m next year.

Host Europe manages some 7m internet domain names and has 1.7m customers across nine data centres, and a large business in Germany.

Chaired by former BBC director-general Lord Birt, Host Europe is currently owned by buyout firm Cinven, which bought it from equity rival Montagu for £438m three years ago.

The sale was put on hold by the UK’s European Union referendum, after it first went under the hammer in the spring of 2016.

Earlier this month it was reported that Deutsche Telekom – working with buyout firm Hellman & Friedman – had withdrawn from the bidding for Host Europe.

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It was also reported that private equity group Permira, which had teamed up with Interroute, had also dropped out of the bidding.

There has recently been a rapid rise in demand from small business owners for managed web services, driving up valuations for many website hosts.

GoDaddy said the deal, subject to customary regulatory requirements, is expected to close in the second quarter of 2017.

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