Market Commentary

  • The third quarter of 2019 has continued on the high pace set by the previous quarter, with key consolidators like Iver, team.blue and Accenture among others continuing to pursue their aggressive acquisitive strategies;
  • The spiked adoption of smart and connectivity devices along with the development of new technologies such as artificial intelligence continue to disrupt the IT services space and all its sub-segments;
  • With regards to global IT spending, an ever-greater portions of enterprise IT decisions, in particular system infrastructure, will be influenced by the cloud over the next few years as it becomes increasingly mainstream;
  • According to Gartner, while there is great variation in growth rates at the country level, virtually all countries will see growth in IT spending in 2019.

Hosting and Managed Services Taxonomy

Web Hosting

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

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Managed Services

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

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IT Outsourcing

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

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Selected Recent HW Hosting and Managed Services Transactions

screen_shot_2019-10-18_at_11.48.55_am.pngProvider 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

 

 

 

 

screen_shot_2019-10-18_at_11.49.25_am.pngProvider 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

 

 

 

 

screen_shot_2019-10-18_at_11.49.56_am.pngProvider 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

 

 

 

 

screen_shot_2019-10-18_at_11.50.26_am.pngProvider of managed technology services with national scale in the US and the capability to design, deploy and support technology solutions from cable to cloud

 

 

 

 

screen_shot_2019-10-18_at_11.51.15_am.pngProvider of SME focused hosting and cloud solutions, including domains website hosting, email for smaller customers and managed servers and applications for larger customers

 

 

 

 

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Provider of managed hosting and cloud solutions specialised in managed cloud hosting, desktop-as-a-service, security and connectivity

 

Market Observations

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*Group weighted average stock price performance over the past year based on market capitalisations

Select Hosting and Managed Services M&A Transactions

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Iver’s Acquisition of IT Garden6

  • IT Garden is an IT services outsourcing provider to small and medium-sized enterprises in the Skåne region
  • The Company delivers IT services within IT outsourcing and infrastructure, virtualisation and client platforms as well as related products
  • The acquisition will help Iver to increase its geographical presence in southern Sweden while also providing IT Garden with adequate resources to broaden its customer base and increase its volume

 

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Remote DBA Experts’ Acquisition of Navisite6

  • Navisite is a US-based provider of managed cloud services
  • The company offers multi-cloud management, Disaster-Recover-as-a-Service, cloud security and compliance, application and hosting services
  • The acquisition increases the depth of RDX’s customer base, expands its global network of data centers and adds hundreds of certified experts in cloud-based infrastructure and application managed services

 

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team.blue’s Acquisition of Register Group6

  • Register Group is an international leader in digital services for professionals
  • The merged entity will be able to serve its customers better, with their combined expertise across domains, hosting, email, VPS and applications
  • The combined group will generate revenues of €275m with Hg further investing in the combined group while also providing the operational support to the new group

 

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One.com’s Acquisition of Digital Garden6

  • Norway-based web hosting business operating three data centers with around 100,000 domain names and approximately 40,000 active customers
  • The combination strengthens both companies’ footprint in the Nordics with an attractive brand and product
  • The transaction is part of Cinven’s buy and build strategy to support One.com organically and through acquisitions into other geographic markets

 

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Liquid Web’s Acquisition of Nexcess6

  • Nexcess is a US-based web hosting provider for e-commerce platforms
  • The acquisition will strengthen Liquid Web’s presence in the web professional hosting market while expanding its product offerings
  • The combined company will have a total workforce of 650 employees with 11 data centers and a full-service Application Web Hosting and Managed Cloud portfolio

IT & Tech-Enabled Services – Trading Comparables

Valuation1

As of September 30, 2019 ($ in millions)

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IT & Tech-Enabled Services – Transaction Activity

Select Recent M&A Transactions*6

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*Conversion to USD based on FX rate as of announcement date

IT & Tech-Enabled Services – Representative Landscape

Representative IT & Tech-Enabled Services Providers

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1. CapIQ; market data as of 30 September 2019

2. MarketWatch

3. Gartner

4. Plesk

5. Data Centre Dynamics

6. Merger Market

 

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