DigitalOcean to Acquire Cloudways For $350 Million In Cash
DigitalOcean Holdings, Inc. (NYSE:DOCN), the cloud for developers, startups, and SMBs, has agreed to acquire Cloudways, a leading managed cloud hosting and software as a service (SaaS) provider for SMBs. The acquisition will simplify workflows for small to medium-sized businesses that are looking for easier ways to build and scale their digital businesses.
Cloudways offers simple onboarding and day-to-day management for certain SMBs looking to outsource their internet on-ramp, allowing them to spend more time running and scaling their businesses rather than dealing with the complexities of cloud infrastructure.
Cloudways’ acquisition broadens DigitalOcean’s serviceable market among global SMBs and extends options for digital agencies, eCommerce sites, bloggers, freelance developers, and builders hosting on WordPress, PHP, and Magento.
WordPress is the most popular content management system (CMS), powering 43% of all websites on the internet, according to W3Techs.
Cloudways is chosen by entrepreneurs and small and medium-sized businesses to improve the performance, value, support, reliability, and flexibility of their infrastructure and application management.
As a result, they will be able to save time and money while expanding their businesses.
Entrepreneurs and SMBs choose Cloudways to optimize the performance, value, support, reliability and flexibility of their infrastructure and application management. Cloudways distinguishes itself through an open and flexible platform, an incredible price-to-performance ratio, and a superior customer experience.
Cloudways and DigitalOcean have been close partners since 2014, with Cloudways relying on DigitalOcean infrastructure to power approximately 50% of its customers.
Cloudways has an industry-leading NPS score of 71 and serves an international and growing customer base.DigitalOcean and Cloudways will serve over 124,000 customers who pay more than $50 per month, representing approximately 84% of the pro forma company’s total revenue.
SMBs account for more than half of global GDP and spend $70 billion on cloud infrastructure today. With this acquisition, we are making it easier to launch, build, and scale a business on DigitalOcean,” said DigitalOcean CEO Yancey Spruill. Cloudways and DigitalOcean share values such as simplicity, community, openness, and support, which are critical to how we differentiate in the market. We will work together to provide a simple, easy, intuitive, and trusted platform to better serve SMBs so they can build their businesses and pursue their dreams of entrepreneurship.”
Cloudways has built a rapidly expanding business that generates free cash flow and has impressive customer metrics. Importantly, we are excited to add Cloudways to the DigitalOcean family because they not only share our vision for the SMB market opportunity but are also a Rule of 50 business that shares our commitment to delivering compelling returns for our investors.
We’ve been working closely with the DigitalOcean team since 2014, and we’re now incredibly excited to be a part of the company,” said Aaqib Gadit, co-founder and CEO of Cloudways. SMBs value simplicity, performance, predictability, affordability, and excellent customer service.”We can accelerate our mission of assisting SMBs in growing by partnering with DigitalOcean.”
In addition to expanding DigitalOcean’s technology and tooling, the acquisition of Cloudways also increases DigitalOcean’s global employee base by 30% — adding expertise in key growth areas that will continue to drive productivity and performance across the platform.
Transaction and Financial Contribution Expected
DigitalOcean will acquire Cloudways for $350 million in cash, with a significant portion of the consideration to be paid over a 30-month period following the closing.
The transaction is expected to close in September and DigitalOcean is forecasting Cloudways to contribute between $13 and $15 million of revenue in fiscal 2022.
About DigitalOcean
DigitalOcean simplifies cloud computing so builders can spend more time creating software that changes the world. With its mission-critical infrastructure and fully managed offerings, DigitalOcean helps developers, startups and small and medium-sized businesses (SMBs) rapidly build, deploy and scale applications to accelerate innovation and increase productivity and agility. DigitalOcean combines the power of simplicity, community, open source, and customer support so customers can spend less time managing their infrastructure and more time building innovative applications that drive business growth.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by their use of terms and phrases such as “anticipate,” “enable,” “expect,” “will,” “believe,” “continue” and other similar terms and phrases. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including those factors contained in the “Risk Factors” section of our SEC filings. We can’t predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this release. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur.
Source: DigitalOcean Holdings, Inc.
