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GoDaddy will pay $1.79 billion for HEG in major Euro expansion

Kevin Murphy, December 7, 2016, Domain Registrars

GoDaddy is to substantially increase the size of its European operation with the $1.79 billion acquisition of Host Europe Group.

The market-leading registrar confirmed yesterday earlier reports that it was on track to buy HEG, which counts several big-name British and German registrars among its brands.

The deal is worth €1.69 billion ($1.79 billion), which breaks down to €605 million to HEG shareholders and €1.08 billion in debt. It’s expected to close in the second quarter next year.

HEG’s domain brands include 123Reg and DomainMonster in the UK and DomainFactory in Germany.

The company says it has 1.7 million customers and manages over seven million domains.

But the acquisition is more concerned with HEG’s higher-margin small business hosting business, where the company has nine data centers in Europe and the US.

GoDaddy said in a press release:

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.

One part of the HEG business, the $92 million-a-year PlusServer, is likely to be sold off, however.

GoDaddy said that unit “serves larger, more mature companies that require a dedicated field sales force and account management”, which is not GoDaddy’s core strength.

The deal means that GoDaddy will become the owner of the annual NamesCon conference, which HEG picked up in August for an undisclosed amount.

The acquisition is unlikely to have closed before this coming January’s NamesCon, so there’s unlikely to be many obvious changes to the 2017 event.

GoDaddy said the acquisition is being financed by debt.

HEG’s current owner is private equity firm Cinven, which paid $545 million in 2013.

Chinese DDoS knocks 123-reg offline

Customers of major UK domain registrar 123-reg suffered a couple of hours of downtime this afternoon due to an apparently “massive” denial of service attack.

The attack targeted its DNS servers and originated in China, according to a report in The Register.

Users reported sites offline or with spotty availability, but the company managed to mitigate the effects of the attack fairly quickly. It’s now reporting mostly normal service.

123-reg, part of the Host Europe Group, has hundreds of thousands of domains under management in the gTLD space alone.

Domainmonster joins 123-reg stable

Mesh Digital, owner of the Domainmonster and Domainbox registrars, has been acquired by rival/partner Hosting Europe Group for an undisclosed sum.

Operating mainly in the UK and Germany, the buyer says it is the largest privately owned hosting company in Europe, already the owner of large registrars including 123-reg/Webfusion, a Mesh reseller.

“They’ve been a technology partner of ours for some time with the Domainbox product, so it’s the logical partner for us,” Mesh CEO Matt Mansell said.

“Our focus isn’t on hosting,” he added. “They’ll bring a good range of hosting and software-as-a-service products to our customers and we’ll bring good domain services to their customers.”

Mansell will join Host Europe as head of domain strategy.

The fact that new gTLDs are expected to launch next year was not a particular driver of the deal, he said.

With its new acquisition, Host Europe will have five million domains under management, according to the company.

Mesh, based in Godalming, UK (it’s 30 miles away and I’ve never heard of it either) has 15 employees and turnover of about $5 million, Mansell said.