The real deal valuation of EIG and HostGator acquisition

The real deal valuation of EIG and HostGator acquisition

HostGator
EIG acquired HostGator (www.HostGator.com) in the middle of 2012, and the acquisition had become the biggest hosting news in that year. Surprisingly, the acquisition was not reported by any official newspapers, most of gossip said EIG cost approximately $225 million to accomplish the transaction.

As a famous hosting provider worldwide, HostGator has been providing high quality web hosting service to hundreds of thousands of customers over 13 years. HostGator provides sorts of hosting businesses such as shared hosting, reseller, VPS and dedicated hosting services, and their customers are coming from every corner of the planet. We’ve been using HostGator web hosting service for over 3 years, and we have never encountered a big issue so far. So HostGator is a real excellent web host that is worthy of our recommendation.

Compared to HostGator, EIG was notorious due to its unscrupulous acquisition in the past years. EIG already acquired or merged over 40+ famous web hosts, e.g., iPage, Justhost, FatCow, iPower, Bluehost, HostMonster, etc. But the pace of their merging and acquisition has never been stopped. How do you think about with this acquisition? After 1 year, everything seems to be the same with previous, but please aware EIG already destroyed many famous hosting brands such as iPower, PowWeb, Justhost, Globat, FatCow, iPage, Webhost4life and many others in recent years, so we do have the worry about the future of HostGator? Maybe EIG guys have learned the lesson from their past acquisitions, and have started to change its management strategy.

When my friend told me that HostGator was sold to EIG, my first response was “Wow, that’s too crazy! Unbelievable!” Frankly speaking, I was really shocked at that moment and I believe most of the webmasters didn’t want to see such things happening. Later, the merger was proved to be truly. However, I thought the value of HostGator should be much higher than $225 million, then I began to investigate the real cost for this acquisition. Whatever, I didn’t discover my thought with any others, but EIG $400 million IPO which revealed what my thought was probably correct. EIG has already paid over $299.8 million to Brent Oxley (CEO of HostGator) which was fully 33 percent over the value prognosticated by medias.

According to the IPO, I believe this was a deal EIG must accomplish. In the end, EIG successfully took over $500 million mission in annual revenues with $150 million courtesy of the HostGator transaction by this IPO.

What’s the value of EIG nowadays? EIG has already become an empire of web hosting business on the globe. After the acquisition, the company value is doubling. In the end of last year, the Inc. Magazine reported that EIG had an approximately $2 billion valuation.

If you’re an existing customer of HostGator, I believe you should have received a notification email about your website would be migrated to a new and more stable web platform. This email indicates that your account and website files are going to be moved to EIG its own data centers within a coupon of weeks. Of course, most of those migration should have finished now, as we’re also a customer of HostGator. Until present, all of our websites are not affected during the migration, looks like the EIG does have learned a lot from their past mergers.

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