CentralNic plc,(AIM:CNIC) acquired Internet.BS, a top 30 domain name registrar for a maximum consideration of USD 7.5 million.
CentralNic said it will pay $5.2 million when the deal closes, with $2.7 million due in cash and $2.5 million to be paid in the form of 2.1 million new CentralNic shares.
An additional $1.8 million payment is deferred.
It is to be paid over 12 months and can be adjusted higher or lower depending on the acquisition’s performance.
The maximum amount that can be paid is $2.3 million
CentralNic shares were Tuesday quoted at 71.95 pence, up 2.1%
You might remember that Demand Media, Inc. paid $18 Million for Name.com.
The company put out a press release early this morning
Internet.BS is a profitable, cash generative business delivering unaudited operating profits and profits after tax of USD $730,000 for the year ending 31 December 2013.
CentralNic gave some talking points on how the acquisition will affect their company going forward:
Impact of the Acquisition
“”The acquisition of Internet.BS is a strategic step for CentralNic, which will position the Company as a vertically integrated platform offering domain names at retail as well as wholesale – one of the key objectives announced at admission to AIM in September 2013.”
“Key strategic drivers for the acquisition include:
– Gaining a proven retail platform already supporting 28,000 users in eight languages, including sophisticated administrative tools for domain portfolio owners;
– Enhancing the revenues and profits of CentralNic with an additional cash generative business retailing domains to consumers and other domain name retailers; and
– Optimizing the earnings opportunity for CentralNic presented by the new Top-Level Domains by giving it access to the retail margin for sales of these domains.
The Board believes that the deal terms are attractive, at under 10x EBITDA, with 35% of the consideration settled in shares.”
We continue to see consolidation in the domain space and this is a trend that will most likely continue in the future.
Is there any information how many domain names the registrar did have?
According to registrarstats, less than 1m. So the price valuation is less than $7 per domain name. CentralNic might have overpaid.
Errata: it is _more_ than $7 per domain name.
and now they are sending notices to EU costumers with a 4 days advance (!) stating that they will be asking a VAT. no other registrar is asking this, so on my part this is goodbye to another registrar…
European based registrars do collect VAT from European customers.
Acro is correct