Hosting and domain name registrar UK2 Group is using the services of an investment banker to find a buyer - the second such attempt in a year, sources have claimed.
Torch Partners is running the process on behalf of owner LDC, the mid-market private equity wing of Lloyds Banking Group, which took a majority stake in the group in 2011 in a management buy-out.
Price was believed to be the sticking point that resulted in the previous auction being pulled, it was claimed by well-placed onlookers.
One told us he believed management wanted 10 times its earnings before interest, taxes, depreciation, and amortisation (EBITDA), which, based on calendar 2014 accounts would value the firm at £62m.
The group’s founding business, no-frills web domain name provider UK2.Net, hit the market in 1998 and spread its tentacles into other internet-related businesses via 13 acquisitions.
UK2 operates data centres in the UK and US, selling services including web hosting, virtual private servers, domain name reg and management, dedicated server and a content delivery network.
In the year ended 31 December 2014, sales fell to £29.3m from £30.3m. Admin expenses were clipped, which lifted operating profit to a little over £642,000 – compared with £229,521 a year ago.
We asked UK2 CEO John Morris to comment and though he replied to our initial email, he did not respond to the subsequent one. ®