CentralNic has contracted to acquire the business and certain of the assets of Internet.BS Corp, a leading retailer of domain names registered in The Bahamas, for a maximum consideration of $7.5m.
CentralNic says Internet.BS is one of the world’s top 30 domain name retailers, and it serves a global customer base from 199 countries. It has been trading for eleven years and it is accredited by the global regulator ICANN as well as the numerous operators of country codes including .eu for Europe and .in for India.
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.
The acquisition is expected to be earnings enhancing from day one, excluding transaction costs. Adapted from Telegraph
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.