Deutsche Telekom Said to Weigh Bid for Web-Hosting Firm HEG

  • German carrier likely to join with buyout firm for offer
  • Cinven said seeking to raise 1.7 billion euros for HEG

Deutsche Telekom AG is considering a bid for Host Europe Group Ltd., the Internet domain registry and website-hosting company owned by private equity firm Cinven Ltd., according to a person familiar with the situation.

Deutsche Telekom, which owns the web-hosting company Strato AG, is likely to team up with a private equity firm for the offer, said the person, who asked not to be identified because the discussions are private. HEG, based in Middlesex, England, could fetch about 1.7 billion euros ($1.9 billion) and is likely to draw interest from buyout firms including Hellman & Friedman and Blackstone Group LP, the person said.

A spokesman for Deutsche Telekom declined to comment, as did representatives of Cinven and Blackstone. Hellman & Friedman didn’t immediately respond to requests for comment.

Cloud computing is an increasingly important business for Deutsche Telekom as more consumers store data online and companies digitize their factories. Cinven, which bought HEG from Montagu Private Equity LLP for 438 million pounds ($625 million) in 2013, expanded the business with acquisitions including of German hosting company Intergenia Holding GmbH last year.

HEG offers its 1.7 million customers domain registration for websites as well as shared and managed hosting, according to its website. The company operates 7 data centers in Europe and the U.S., and employs more than 1,000 people.

Reuters previously reported Deutsche Telekom’s interest.

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