Closing executed: Deutsche Telekom AG (DTAG) completes €600m divestment of STRATO to United Internet and Warburg Pincus. DTCP advised on the transaction.

The acquisition of Berlin-based hosting service provider STRATO by a holding jointly owned by United Internet and Warburg Pincus, has been closed after regulatory clearance from the German Federal Cartel Office was obtained in February.

  • DTCP acted as the exclusive strategic advisor to DTAG in a dynamic divestment process
  • STRATO’s valuation of around €600m Enterprise Value (including earn-out) corresponds to a 12.4x EV/EBITDA 2016 multiple
  • The divestment proceeds and cash extracted over the holding period resulted in a return of 2.5x money on invested capital for DTAG

STRATO is the second largest player in the German mass hosting market, after United Internet‘s hosting unit and ahead of Host Europe Group (HEG), the latter having been acquired by GoDaddy in December 2016.

From 2014 onwards, DTCP acted as strategic advisor to DTAG and helped kick-start STRATO’s successful development. By driving STRATO’s strategic review and divestment process, DTCP supported DTAG in executing on a value-creation strategy and responding to the challenges of market consolidation and the expansion of large international players into the European hosting market.

About Deutsche Telekom Capital Partners (DTCP)

DTCP provides venture capital, private equity, and advisory services to the technology, media and telecommunication sectors. Operating as a bridge between Europe, Silicon Valley and Israel, the company connects people, capital, and ideas to accelerate innovation and provide value to its portfolio companies, its limited partners, and the connected world.

To learn more about DTCP, visit telekom-capital.com and follow @Telekom Capital on Twitter.