United Internet sells web hosting stake; delays IPO
- Wall Street again marks new highs in post-election run
- Broadcom Ltd. (AVGO) Tops Q4 EPS by 11c
- Restoration Hardware (RH) Tops Q3 EPS by 4c; Guides Well Below the Street
- Unusual 11 Mid-Day Movers 12/8: (COOL) (TLRD) (DRAM) Higher; (SHIP) (OHRP) (MLSS) Lower
- After-Hours Stock Movers 12/08: (FNSR) (AVGO) (GLPG) Higher; (XTLY) (RH) (DLTH) Lower (more...)
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
By Maria Sheahan and Georgina Prodhan
FRANKFURT (Reuters) - Germany's United Internet has agreed to sell a stake in its web-hosting business to private equity firm Warburg Pincus, netting 450 million euros ($497 million) for the deal but delaying a public listing of the business beyond next year.
Under the agreement Warburg Pincus will take a 33 percent stake in the Business Applications unit and install Managing Director Rene Obermann, a former chief executive of Deutsche Telekom, on the unit's supervisory board.
It values the business, which provides services including home pages and marketing tools to small and medium-sized companies and freelancers, at 2.55 billion euros including 1.2 billion euros of debt.
Shares in United Internet, which will keep a 66.7 percent stake in the business, turned positive on the news and closed 5.3 percent higher at 38.76 euros, topping Germany's technology index.
United Internet's CEO Ralf Dommermuth told journalists on a call on Tuesday the move would delay an IPO of the business originally foreseen for 2017 but would allow United Internet to invest in the business and make acquisitions.
"It's a stepping stone to an IPO. It won't be 2017," he said. "Things sometimes don't turn out as planned."
Sources told Reuters last month that United Internet and Warburg Pincus were teaming up on a bid for rival German web-hosting provider Host Europe Group (HEG), which is being sold by private equity group Cinven.
Cinven strengthened the group with a series of acquisitions of its peers, as the fiercely competitive Internet service provider industry consolidated, before putting it up for sale.
(Reporting by Maria Sheahan; Editing by Jane Merriman and David Evans)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UK PM May's Conservatives retain seat in Sleaford by-election: Sky News
- Japan's frugal millennials a bad omen for its economy
- Japan nearly doubles Fukushima disaster-related cost to $188 billion