Internet entrepreneur celebrates £61m deal
Thursday 11 May 2006
A computer company well known for throwing the most lavish Christmas parties in Britain was sold yesterday, leaving the 26-year-old founder £46m richer.
Fasthosts made headlines last year after an office bash that featured Jonathan Ross, the rock band the Darkness, free Cristal champagne and fire-jugglers. Yesterday it was bought by United Internet, a German internet service provider, for £61.5m.
Andrew Michael, who began the business from his bedroom as part of an A-level project at the age of 17, owned 75 per cent of the company.
Mr Michael insisted yesterday that he has not yet calculated how much he is now worth, but conceded he has "more money than I know what to do with".
Fasthosts provides e-mail and other web services to small businesses across the UK from its headquarters in Gloucester.
It has won plaudits as one of the fastest-growing privately owned companies in the UK, but has also had teething problems with its technology.
A few years ago its network collapsed, leaving customers unable to collect orders or send e-mails.
Mr Michael, who was born in Cyprus, is intending to stay with the business despite his new-found wealth.
"I haven't worked out how much it is yet. But I am looking forward to next Christmas. Five decent parties and it will probably all be gone," he said.
Last year's party sounded like a scene from a novel about Wall Street excess. At a cost of £600,000, 200 employees and their spouses stepped on to a red carpet that led to a marquee in Gloucester's football ground.
Jonathan Ross, the chat show host, orchestrated proceedings, with music from Boney M and the Darkness, of whom Mr Michael is a big fan.
The semi-serious rock group's songs include "Get Your Hands Off My Woman", "Love on the Rocks with No Ice" and "One Way Ticket."
At the free bar, guests enjoyed champagne, vintage wines and a selection of fine spirits.
Earlier Christmas parties that were paid for by Mr Michael saw staff entertained by, among others, Girls Aloud, Sugababes, the Cheeky Girls and Louise Redknapp.
Fasthosts boasts that it is the "UK's number one web host". Sales have soared from £240,000 in 1999 to £20m last year.
The company insists that customers will not be affected by the change of ownership - and that next year's party will be bigger than ever.
United Internet is one of the best-performing technology shares on the German stock market.
In a dry statement to the Frankfurt exchange unveiling the deal, United said: "This take over aims at the extension of United Internet's existing activities in the UK."
Asked why he has sold the business, Mr Michael said simply, "it was the right time". It is thought that an earlier attempt to sell Fasthosts to Pipex Communications, a telecom company that is building a Wi-Max network in the UK, failed at the final hurdle.
The history of companies that get famous for throwing really good parties is not encouraging.
Tyco International, a US business that included the former Conservative Party treasurer Michael Ashcroft as a board member, became notorious after holding an extravagant party for the wife of its chief executive, Dennis Kozlowski. The Roman Empire-themed celebration cost £1.5m and featured an ice-sculpture of Michelangelo's David urinating Stolichnaya vodka into crystal glasses. Kozlowski is now serving up to 25 years in prison after being found guilty of stealing hundreds of millions of dollars from the company.
Mr Michael said he would certainly avoid this fate. He declined to comment on rumours that U2 are in the running to headline this year's Fasthosts Christmas party.
Those interested in applying for a job at Fasthosts should go to fasthosts.co.uk.
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