Private equity investor LDC has sold web-hosting business UK2 to The Hut Group, an online health and beauty retailer, for an undisclosed sum.
The sale comes six years after LDC backed a management buyout of the UK2 Group from Cloud Group.
The sale does not include UK2’s US-based online sports business Digital Chaos, which remains under LDC’s ownership.
UK2 was established in 1998 and operates seven brands including 100TB. It provides dedicated server and cloud services to small and medium sized businesses and corporates, as well as data analytics, shared hosting and domain registration services. It employs over 200 people in 26 locations throughout the world.
Simon Adcock, Senior Portfolio Director at LDC, who led the process, said: “After a six-year journey with LDC, this is an excellent outcome for employees, management, customers and shareholders, and an ideal strategic fit for both businesses. For an ambitious, technology-led group like The Hut Group, hosting is mission-critical - UK2 provides a well-invested, plug-in capability to strengthen and enhance their existing infrastructure and support their growth.”
The Hut Group said the acquisition was a strategic opportunity to develop the existing proprietary technology platform behind its health and beauty brands and would further enhance its existing server infrastructure, programmatic development and platform security.
It plans to invest heavily in the existing management team and the employee base to support the growth of key brands and will be offering UK2’s services to its existing technology clients, including DMGT plc, Nintendo, Unilever, Nectar, Honda, and Elizabeth Arden.
Matthew Moulding, Founder and CEO of The Hut Group said: “This is a significant technology investment to support our growth plans and provide a world class proprietary ecommerce platform and infrastructure to increase capacity, speed and resilience for our global customer base. We expect this to be the start of further significant investment in UK technology with a further 1,000 new technology jobs planned over the next three years.”
LDC is part of Lloyds Banking group and backs management teams from UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions.