Hosting wars : Germany’s United Internet AG acquired Strato for 600 million euro

United Internet.

United Internet AG, owners of 1&1, agreed to acquire web hosting company Strato AG from Deutsche Telekom, for 600 million euro.

The mother company of Sedo will pay 566 million euro cash up front, with another 34 million euro at a later point subject to certain performance goals.

Ralph Dommermuth, CEO of United Internet, stated about the acquisition:

“The acquisition of Strato will enable us to expand our leading market position in the European hosting and cloud application business and drive the consolidation of a market which is currently still strongly fragmented. In future we will offer our customers products and services with even greater performance.”

Dr. Christian Böing, CEO of Strato, said:

“We are delighted by United Internet’s investment. The cultures of the two companies fit perfectly together. We will use the resulting potential and synergies from the combination to drive growth in the hosting market and offer our customers even better products.”

Based in Berlin, Germany, Strato employs over 500 people with operations mainly in Germany and the Netherlands and over 2 million customer contracts. Strato’s revenue for the fiscal year 2016 is forecast around 127 million euro, with an expected EBITDA of approximately 48.5 million euro.

United Internet AG is Europe’s leading internet specialist, with 16.75 million fee-based customer contracts and 33.44 million ad-financed free accounts.

At the heart of United Internet is a high-performance “Internet Factory” with approx. 8,000 employees, of which around 2,700 are engaged in product management, development and data centers.

It owns several established brands, including: 1&1, GMX, WEB.DE, united-domains, Fasthosts, Arsys, home.pl, InterNetX, Sedo, affilinet and 1&1 Versatel.

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