Mergers and Acquisitions, CSPs

United Internet Acquires Strato AG for Hosting Services

United Internet AG has acquired Strato AG, a Berlin-based hosting provider, from Deutsche Telekom AG, the companies have confirmed. The deal is valued at roughly 12.4 times EBITDA -- a bit more than the typical hosting deal of about 11 times EBITDA, according to ChannelE2E estimates.

United Internet claims to be Europe's "Number One Internet Specialist," employing about 8,000 people and promoting consumer and business applications to its customer base. Strato has about 500 people, operations in Germany in the Netherlands and more than 2 million customer contracts in place.

Strato’s annual revenue for fiscal year 2016 is forecasted to be around EUR 127 million (US $132.28 million) with anticipated EBITDA 2016 of around EUR 48.5 million (US $50.52 million). Note: The Euro-to-US exchange rates were current as of Dec. 19, 2016. United Internet is paying about EUR 600 million (US $624.96 million), or a healthy 12.4 times annual EBITDA.

Strato's products and services include portfolio includes domains, e-mail packages, complete website packages, webshops, servers, online storage and individual high-end hosting solutions. The business includes two data centers, located in Berlin and Karlsruhe, respectively.

This is the second major European hosting provider buyout in recent weeks. GoDaddy acquired Host Europe Group for $1.79 billion, or roughly 11 times EBITDA earlier this month.

Complete M&A Coverage: Track all VAR, MSP and CSP mergers and acquisitions by visiting the ChannelE2E Milestones section daily.



Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.