United Internet Buys 10.7 Percent of Rocket for $582 Million

United Internet AG, an online-access and domain provider, bought a 10.7 percent stake in Rocket Internet AG for 435 million euros ($582 million).

United Internet is paying 333 million euros in cash and will transfer its equity participation in the portfolio of Global Founders Capital funds to Rocket, representing 102 million euros, according to a statement today. Global Founders Capital is an investment venture jointly held by United Internet and Rocket Chief Executive Officer Oliver Samwer.

Earlier this month, Rocket sold a stake to Philippine Long Distance Telephone Co. that valued the German Internet-startup investor at about 3.3 billion euros as it prepares for an initial public offering.

Rocket plans to sell shares in the coming months and could seek a valuation of as much as 5 billion euros, people familiar with the matter said earlier this month. The company, founded in 2007, is seeking funds from the initial public offering to expand in markets outside China and the U.S.

Under the terms of today’s deal, United Internet will buy newly issued shares by Berlin-based Rocket. Ralph Dommermuth, United Internet’s CEO, will become a member of Rocket’s supervisory board.

In addition to United Internet’s 10.7 percent stake in Rocket, Investment AB Kinnevik holds 18.5 percent, Access Industries 8.5 percent; Philippine Long Distance Telephone has 8.6 percent; and Global Founders Fund 53.7 percent, according to the statement.

Kinnevik said it welcomes United Internet’s investment.

By contributing its shares in Global Founders Capital to Rocket, Montabaur, Germany-based United Internet will recognize one-time, non-cash income of about 70 million euros this year, the company said.