The IPOX® Watch - IPO Pre-Launch Analysis: IONOS
COMPANY DESCRIPTION
IONOS is a German web hosting firm, which is a unit of the internet services firm United Internet. United Internet was founded in 1988 in Montabaur, Germany and went public in 1998 as 1&1 Internet, which primarily started trading as an internet service provider (ISP). The IONOS unit was formed after the acquisition of the web hosting firm Strato for €600m in 2016 and merger with cloud infrastructure specialist ProfitBricks (founded by IONOS’s now-CEO Achim Weiss) in 2018. In 2016, private equity firm Warburg Pincus took a 33% stake in United Internet’s newly formed web hosting and cloud-focused Business Applications unit, which was the foundation of the IONOS unit that was created as 1&1 IONOS in 2018.
BUSINESS MODEL
IONOS’s main area of business (90%) is internet hosting, which includes websites, e-commerce shops, domains and email servers. According to Web Technology Surveys, the firm (as part of United Internet) had a global market share of 2.0% in the web hosting space in February 2023, behind direct rivals Squarespace (2.1%), Wix (2.5%) and GoDaddy (3.6%).
Their second area of business (10%) is IONOS Cloud, where they account for 2.1% of the global market share in data center providers, behind competitors such as Amazon (8.7%), Google (7.2%), Microsoft (1.2%), France’s OVH (3.7%) and New York-listed DigitalOcean (2.1%). In Europe, IONOS is the web hosting market leader in Germany (51%), Spain (21%) and Austria (19%) and number 2 in the United Kingdom (13%), Poland (11%) and France (10%). IONOS accounts for approx. 20% of revenue of parent United Internet.
IPO HISTORY
On February 7, 2023, IONOS announced the pricing of their IPO at €18.50/share, raising €389m ($416m) at the bottom of their price range, giving the company a market capitalization of about €2.24 billion. The company will start trading in Frankfurt tomorrow, February 8, 2023.
After putting up 21 million shares for sale at the offering (free float of 17.3%), the selling shareholders United Internet and private equity firm Warburg Pincus will keep 60.1% and 20.6% of the company, respectively. IONOS themselves didn’t raise any money from the offering. The IPO is being led by JPMorgan Chase & Co., Deutsche Bank AG, Berenberg and BNP Paribas SA.
