Website domain name provider GoDaddy is buying rival Host Europe Group (HEG) €1.69bn (£1.42bn) including debt.
The move is designed to help accelerate GoDaddy’s international expansion and expand its services beyond the initial set-up of websites.
Host Europe is currently owned by private-equity firm Cinven and has a debt pile of about of €1.08bn.
GoDaddy chief executive Blake Irving said:
GoDaddy has successfully expanded its international business to 56 global markets over the past four years.
By joining forces with HEG, we accelerate our expansion into Europe with the delivery of a broader range of cloud-based products, built on a single global technology platform, and supported by unparalleled customer care to help small businesses and web designers succeed online.
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Bankers had valued Host Europe at around £1.6bn to £1.7bn, after it posted a 45 per cent increase in underlying profits to £95m last year. Earnings are forecast to rise to £140m next year.
Host Europe manages some 7m internet domain names and has 1.7m customers across nine data centres and a large business in Germany.
Chaired by former BBC director-general Lord Birt, Host Europe is currently owned by buyout firm Cinven, which bought it from equity rival Montagu for £438m three years ago.
The sale was put on hold by the UK’s European Union referendum, after it first went under the hammer in the spring of 2016.
Earlier this month it was reported that Deutsche Telekom – working with buyout firm Hellman & Friedman – had withdrawn from the bidding for Host Europe.
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There has recently been a rapid rise in demand from small business owners for managed web services, driving up valuations for many website hosts.