Developer cloud provider DigitalOcean to acquire Cloudways for $350M

CLOUD

DigitalOcean Holdings Inc., the provider of cloud infrastructure for developers, today announced it agreed to acquire the cloud-based website hosting service CloudWays Ltd. for $350 million.

The company operates a platform designed to simplify cloud computing so that developers can spend more time creating software instead of worrying about infrastructure. It’s aimed at startups and small and medium-sized business users with a cloud infrastructure-as-a-service offering.

DigitalOcean chose CloudWays because the two companies have been working closely since 2014 and CloudWays currently relies on DigitalOcean’s own infrastructure to power more than half of its own customer’s experiences. Together the two companies will serve more than 124,000 customers.

The CloudWays platform simplifies website hosting for businesses by offloading the management and scaling of every aspect of the stack, by offloading the day-to-day technical management and letting them get about their day. It’s particularly aimed at organizations running software such as WordPress, PHP and Magento. WordPress is the most popular content web content management software in the world, representing 43% of all websites, according to W3Techs.com.

“Cloudways and DigitalOcean share values around simplicity, community, openness and support that are vital attributes to how we differentiate in the marketplace,” said Yancey Spruill, chief executive of DigitalOcean. “Together, we will be focused on providing a simple, easy, intuitive and trusted platform to better serve SMBs so they can build their businesses and pursue their dreams of entrepreneurship.”

For the moment, CloudWays will remain a standalone business unit and continue to operate under the leadership of its co-founder and CEO Aaqib Gadit. Current users will see no changes to their services under the acquisition.

The deal is expected to close in September, and a “significant portion” of the all-cash deal will be paid within a 30-month period following the closing.

Earlier this month, DigitalOcean reported strong growth in its revenue, with an annual run-rate revenue of $544.1 million at the end of the quarter, up 28% from last year. After closing the transaction, CloudWays is expected to contribute between $13 million and $15 million in additional revenue in the current fiscal year.

Image: DigitalOcean