Afilias today announces its intention to apply for admission of its issued and to be issued Ordinary Shares to trading on AIM, a market operated by the London Stock Exchange (“Admission”) to raise $100 Million dollars.

“The $100 million will be used to:

·      Acquire contested nTLDs in the upcoming auctions;

·      Fund attractive acquisition opportunities including existing TLD assets and operating businesses in the Registry Operator and Registry Service Provider   areas; and

·      Develop the Group’s existing Registrar business to become an integrated operation.

 The Placing will comprise an offer of new and existing Ordinary Shares.

The Placing will enable the Group to:

·      Pursue its growth strategy;

·      Increase Afilias’ corporate profile with existing and new customers;

·      Assist in incentivising and retaining key management and employees;

·      Create a liquid market in the Ordinary Shares for Shareholders; and

·      Provide the Selling Shareholders with a partial realization of their investment in the Company.

The Placing will comprise an offer of new and existing Ordinary Shares. New Ordinary Shares to be issued by the Company are expected to raise gross proceeds of approximately US$100 million. The net proceeds from the Placing receivable by the Company will be used to pursue its growth strategy, as described above.

 The Placing will also provide the Directors and certain other Shareholders (the “Selling Shareholders”) with an opportunity for a partial realisation of their investment in the Company.  The Selling Shareholders will agree to customary lock-up arrangements in respect of their remaining holdings of Ordinary Shares for specified periods of time following Admission.

 Immediately following completion of the Placing, it is expected that the Company will have a free float of approximately 30% of the issued share capital of the Company. It is currently expected that Admission will take place in November 2014.”

Of course other registries publicly traded on the AIM haven’t fared particularly well in trading.

Minds + Machines (MMX)  is trading around 10p with a 52 week high of 17.50 and a low of 8.63

Centralnic (CNIC) which went public at 62p shot up to a 52 week high of 115.50.  Shares current sit at 46p near its 52 week low of 45.5p

Afilias is the Registry Operator for the .INFO, .MOBI and .PRO generic TLDs (“gTLDs”) and 8 further gTLDs as part of the Internet Corporation for Assigned Names and Numbers (“ICANN”) 2012 programme of new gTLDs (“nTLDs”) pursuant to agreements with ICANN. As a Registry Operator, Afilias maintains the master directories of all Domain Names in these TLDs.

Afilias also acts as Registry Service Provider for a number of generic and country code TLDs (“ccTLDs”). For example, Afilias has an agreement with the .ORG Registry Operator, Public Interest Registry (“PIR”), to provide Registry services in support of PIR’s management of the .ORG TLD. Afilias has similar agreements with a number of other Registry Operators including SITA, the .AERO Registry Operator, and DotAsia, the .ASIA Registry Operator. In addition, Afilias provides services as Registry Service Provider for several ccTLDs such as .IN and .ME (the country codes for India and Montenegro, respectively).

In total, Afilias supports Registries for more than 20 million Domain Names, comprising approximately 6.6 million Domain Names as a Registry Operator and 13.5 million Domain Names as a Registry Service Provider. Afilias is today the world number two market participant behind Verisign for Domain Names under management¹ and the number one Registry Service Provider for gTLDs launched pursuant to the 2001 to 2004 rounds².

As part of ICANN’s 2012 round of nTLDs, Afilias was associated with a total of 305 initial applications for nTLDs either directly as Registry Operator or indirectly as Registry Service Provider to other applicants. As at 3 October 2014, 8 nTLDs have been launched with Afilias as Registry Operator (including .ORGANIC, .BLACK and .移动(.MOBI)), 11 have been launched with Afilias as Registry Service Provider (including .VEGAS, संगठन (.HINDIORG) and 机构 (.CHINESEORG)).  51 applications have been withdrawn in Afilias’ capacity as both Registry Operator and Registry Service Provider.

 

Key strengths

 A global leader in Domain Names under management

 

A market-leading position with the second-largest number of Domain Names under management globally.

The largest global Registry Service Provider by number of Domain Names under management.

 

Focus on the operation and management of TLDs – a significant market with approximately 280 million Domain Names registered globally across all TLDs.³

 Major participant in the 2012 new gTLD programme

 

Afilias was associated with 254 active applications⁵, either as Registry Operator or as Registry Service Provider, as at 3 October 2014.

Afilias is targeting up to 25 nTLDs as Registry Operator and up to 200 nTLDs as Registry Service Provider following completion of the current nTLD ICANN application programme.

 

Track record of revenue growth, increasing from US$61.7 million in 2011 to US$77.6 million in 2013, representing a CAGR of approximately 12%. Over this period, Adjusted EBITDA increased from US$19.4 million to US$38.6 million representing a CAGR of approximately 41.2%.

High margins with an Adjusted EBITDA margin of 31.4% in 2011 increasing to 49.8% in 2013.

Strong cash flow generation with high levels of cash conversion. Cash flow from operations as a percentage of Adjusted EBITDA was 137% in 2011, 96% in 2012 and 119% in 2013.

 Successful track record of identifying, executing and integrating acquisitions, such as mTLD Top Level Domain Limited (acquired in 2010) and Registry Services Corporation (acquired in 2011), the Registry Operators for the .MOBI and .PRO gTLDs, respectively.

 Well-developed sales and marketing channels, via approximately 600 Registrars worldwide (that collectively account for over 95% of the global Domain Name sales channel) including global leaders and important niche players.

 

Key financials

 

	Year ended	Year ended	Year ended	Half year ended	Half year ended
	31 December	31 December	31 December	30 June	30 June
	2011	2012	2013	2013	2014
US$’000	audited	audited	audited	(unaudited)	(unaudited)
Revenue	61,736	74,477	77,625	38,039	39,421
Gross profit	36,619	45,443	51,703	25,124	26,363
margin	59.3%	61.0%	66.6%	66.0%	66.9%
Adjusted EBITDA (unaudited) 1	19,360	32,138	38,621	18,773	18,109
margin	31.4%	43.2%	49.8%	49.4%	45.9%
Operating profit	14,583	25,764	30,355	14,496	15,363
margin	23.6%	34.6%	39.1%	38.1%	39.0%
Operating cash flow2	26,536	30,892	45,936	24,525	21,230
% Adjusted EBITDA	137%	96%	119%	131%	117%

Rationale for the Placing