Hosting and Managed Services Introduction
- Continued consolidation and investment activity across managed hosting and services with more than fifteen significant transactions in the past 6 months.
- Buoyant M&A activity in the mass hosting space, with a number of major players being recently acquired. Further consolidation is expected in the near future.
- Growth in cloud managed services driven by the rising adoption of big data, with cloud-based security services expected to experience particularly high growth on account of the surge in adoption of mobile data security services.
- The digitization of specialised processes, for example through automation and relocation to the cloud, as well as the use of machine learning and robotics, have been driving significant growth across the IT services industry.
- In a context of distressed equity markets (the NASDAQ and S&P500 falling by c. 17% and 14% respectively in the last quarter), public market valuations are lower across the board. That said, the global IT services sector has been relatively resilient.
- However, private markets valuations continued to reach new heights.
Hosting and Managed Services Taxonomy
Refers to a service in which a vendor offers the housing of business-to-business or business-to-consumer e-commerce websites via vendor-owned shared or dedicated servers and applications for enterprises at the provider-controlled facilities
Selected Market Participants
Refers to the delivery of network, application, system and e-management services across a network to multiple enterprises, using a “pay as you go” pricing model
Selected Market Participants
Refers to the use of external service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes
Selected Global Market Participants
Selected Recent HW Hosting and Managed Services Transactions
Provider of mass hosting services for SMEs, including web hosting, domains, e-commerce and application solutions with leading positions in Belgium and Denmark and a growing presence in the Netherlands, Sweden and Switzerland
Provider of services allowing SMEs to move their IT infrastructure and operations into the cloud, as well as providing end user support and consulting as part of a full-service IT offering
Provider of web domains, shared web hosting and value-added services with leading positions in Sweden and the Czech Republic, and presence in Norway, Serbia, Slovakia, Spain, Netherlands, Germany and the UK
Provider of managed technology services with national scale in the US and the capability to design, deploy and support technology solutions from cable to cloud
Provider of SME focused hosting and cloud solutions, including domains website hosting, email for smaller customers and managed servers and applications for larger customer
Provider of managed hosting and cloud solutions specialised in managed cloud hosting, desktop-as-a-service, security and connectivity
Select Hosting and Managed Services M&A Transactions
Hg’s Acquisition of Combell2,3
• Belgium-based provider of mass hosting services for SMEs across Europe
• Combell has over 800,000 SME and SoHo customers and is a one-stop partner for web hosting, domains, e-commerce and application solutions
• Hg’s deep sector expertise and track record will help Combell to continue adding selective M&A on its platform while further developing its applications offering
Computacenter’s Acquisition of FusionStorm2
• US-based provider of IT consulting, technology solutions and cloud/managed services to enterprises
• FusionStorm has extensive expertise in the design and implementation of web-scale data center environments, and the logistics capabilities for large-scale, multisite technology rollouts
• This complementary and incremental acquisition enables Computacenter to offer a full range of services in the US, consistent with the Group's offerings in Europe
Inflexion’s Minority Investment in UKFast2
•UK-based provider of cloud and hosting platforms for businesses and government organisations to outsource critical IT infrastructure
•UKFast has a customer base of 5,500 UK SME clients and 200 mid-sized companies, which are served by UKFast’s 350 employees
•Inflexion is backing UKFast to further tap into the growing IT infrastructure services market
Cinven’s Acquisition of One.com2,3
•Denmark-based provider of domain names and web hosting services to SME and SoHo customers
•One.com has 270 employees and serves more than 1 million customers, with a focus on Northern Europe
•Cinven will focus on accelerating One.com’s organic growth and further consolidating the Nordics
NEC’s Acquisition of KMD2
•Denmark-based specialist in the integration of IT and network technologies
•KMD mainly provides software and IT services in Denmark through business models that generate profit continuously on a recurring basis, such as SaaS offerings
•This acquisition will accelerate NEC's global safety business, which it has positioned as a growth engine in its three-year medium-term management plan
IT & Tech-Enabled Services – Trading Comparables
IT & Tech-Enabled Services – Transaction Activity
Note: convertion to USD based on FX rate as of announcement date
IT & Tech-Enabled Services – Representative Landscape
Representative IT & Tech-Enabled Services Providers
1.Factset; market data as of 31 December 2018.
3.HW proprietary transaction information.
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