July 19, 2013 / 7:56 AM / 6 years ago

Cinven buys Host Europe from Montagu in $666 mln deal

LONDON, July 19 (Reuters) - Private equity firm Cinven has agreed to buy internet domain and hosting company Host Europe Group from Montagu Private Equity for 438 million pounds ($666 million), the two buyout houses said in statements on Friday.

The price was roughly double the 222 million pounds Montagu paid for the company in October 2010. Host, whose sales have grown by more than 60 percent since then, has around 1.5 million retail and wholesale customers, and a big position in Europe’s two largest markets, the UK and Germany.

Cinven said in a statement it was attracted to Host because the hosting industry is growing rapidly, supported by demand for cloud computing and greater internet presence among small and medium sized businesses, and because the market is ripe for consolidation as it remains highly fragmented.

For Montagu, the sale marks its sixth exit this year, and the buyout firm has now returned upwards of 1 billion euros to investors in 2013, a source with knowledge of the deals said. Previous sales include ghd, ADB, Unifeeder and Hansen Protection.

Private equity exits have picked up this year thanks in part to a recovery in the market for initial public offerings, although a big chunk of exits in Europe are still made by selling companies to rival buyout houses, known as secondary deals.

Montagu was advised by UBS and Cinven by Oakley Capital Corporate Finance and Morgan Stanley.

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