UK-based domain name registrar NetBenefit Plc made the first move in the consolidation of its market Friday, announcing its acquisition of private rival NetNames International Ltd in a deal worth around 20m pounds ($32.4m) in cash and shares. Both companies register domain names, but while NetNames is a pure registrar, NetBenefit offers additional services like web hosting and email to increase the value of customers.
NetBenefit has a consistent track record of converting domain name customers into purchasers of a broad range of related products, said NetBenefit CEO Jonathon Robinson. About 60% of its revenues come from hosting web sites, with 30% from domain services, and 10% with other activities like email services.
NetNames has offices in London, Sydney and New York, and turned over 2.35m pounds ($3.81m) in the year to March 31, running up a loss of 908,000 pounds ($1.47m). The three months to June 30 were rather better, a 144,000 pounds ($233,000) loss on revenue of 902,000 pounds ($1.46m). Under the terms of the deal, NetBenefit will give NetNames shareholders 1.1m pounds ($1.8m) cash, with approximately 15.8m pounds ($25.6m) in new shares. It will also issue new shares to raise 3.3m pounds ($5.35m), some of which will be used to pay off NetNames’ debts.
The expanded group plans to move up from the Alternative Investment Market to London’s Official List.
