United Internet Said to Weigh Bid for Cinven’s Host Europe

  • German company working with advisers; no decision made on bid
  • Deutsche Telekom also considering offer for web-hosting firm

United Internet AG is considering a bid for Host Europe Group Ltd., the internet domain registry and web-hosting company owned by Cinven Ltd., according to two people with knowledge of the information.

United Internet, which offers web hosting along with internet access and website-making tools, is working with advisers to evaluate a potential bid, said the people, who asked not to be named discussing plans that haven’t been announced. The Montabaur, Germany-based company hasn’t decided whether to pursue an offer and may not do so, one of the people said.

A purchase of Host Europe would bolster an increasingly important business of web hosting and cloud computing at United Internet, as more consumers store data online and companies hook factories to the web. United Internet is open to buying international web-hosting companies with a focus on its existing markets, Chief Executive Officer Ralph Dommermuth said in an interview last month.

United Internet declined to comment. Cinven had no immediate comment.

Deutsche Telekom AG, which owns the Strato AG web-hosting business, is also considering a bid for HEG, a person familiar with the situation said last week.

United Internet rose 1.3 percent to 39.15 euros at 14:47 p.m. Frankfurt. Drillisch AG fell as much as 6.4 percent in Frankfurt after the news, which quelled speculation that United Internet may raise its stake in the wireless operator, according to Jochen Reichert, an analyst at Warburg Research.

“A potential bid for HEG would not leave room for a takeover of Drillisch at the same time,” Reichert said Thursday.

In past years United Internet has acquired web-hosting companies including Arsys Internet and United-Domains AG. It has been weighing an initial public offering of its business applications division, which competes with domain registration services and web-hosters including GoDaddy Inc.

Cinven, a private equity firm based in Guernsey, Channel Islands, bought Host Europe from Montagu Private Equity LLP for 438 million pounds ($651 million) in 2013, expanded the business with acquisitions including of German hosting company Intergenia Holding GmbH last year.

The transaction value of Host Europe is 584 million pounds including “aggregate buy and build” values, according to Cinven’s website.

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