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Donuts gets bought by former ICANN CEO’s firm

Kevin Murphy, September 5, 2018, Domain Registries

Donuts is to be bought by a private equity firm that has a former ICANN CEO as a partner.

The company, which holds the largest portfolio of new gTLDs, has agreed to be acquired by Boston-based private equity firm Abry Partners for an undisclosed sum.

Not much info about the deal has been released, but one senses an ICANN alum’s hand at the wheel.

Former ICANN chief Fadi Chehade is a partner at Abry, having been initially employed as senior advisor on digital strategy back in 2016 after he left ICANN.

Abry, on its web site, says it focuses its investments on profitable companies, adding:

Depending on the type of fund, we target investments from $20 million to $200 million.

Since Abry’s inception, we’ve developed deep industry expertise in Broadband, Business Services, Communications, Cybersecurity, Healthcare IT, Information Services, Insurance Services, Internet-of-Things, Logistics, Media, and Software as a Service.

Since its formation in 1989, Abry has “completed more than $77 billion of transactions, representing investments in more than 650 properties.”

Donuts was founded by domain veterans Paul Stahura, Jon Nevett, Richard Tindal and Daniel Schindler in order to take advantage of ICANN’s new gTLD program..

It was initially funded by $100 million from Austin Ventures, Adams Street Partners, Emergence Capital Partners, TL Ventures, Generation Partners and Stahurricane.

It currently runs over 200 TLDs, the most populous of which I believe is .ltd, with over 400,000 names.

Donuts is the latest of a series of domain companies to exit via the private equity route, notably following Neustar and Web.com.

Chehade was ICANN’s CEO between 2012 and 2015. While he was not involved in the industry during the new gTLD’s program’s inception, he did oversee its early years.

More consolidation? Endurance said to be up for sale

Kevin Murphy, August 27, 2018, Domain Registrars

Endurance International Group is reportedly up for sale, perhaps the next piece of consolidation or privatization in a rapidly changing domain name market.

Bloomberg, citing unnamed sources, reports today that EIG is “is considering strategic options, including a possible sale”.

EIG owns domain brands Domain.com, BigRock, BuyDomains and ResellerClub, along with a bunch of hosting properties such as HostGator.

Bloomberg’s sources stressed that no final decision has been made, and that the company could remain public.

It’s currently listed on Nasdaq where it has a market cap today of almost $1.38 billion .

The company would be far from the first to change ownership in the last couple of years.

Most recently, Web.com (Network Solutions et al) announced a plan to go private in a $2 billion deal.

A year ago, Neustar went private in a $2.9 billion deal.

In terms of industry consolidation, we’ve more recently seen KeyDrive reverse into CentralNic and MMX buy ICM Registry.

KeyDrive reverses into CentralNic in $55 million deal

CentralNic this morning confirmed that it has signed a deal to merge with KeyDrive to dramatically grow its market share in the registrar and registry markets.

The deal, technically a reverse takeover, is worth up to $55 million, $10.5 million of which is performance-related.

KeyDrive is the holding company for brands including the registrars Key-Systems, Moniker and BrandShelter and the registries OpenRegistry and KSRegistry.

It is by far the bigger player in the registrar space. The combined company will have 7.1 million domains under management, 5.8 million of which will come from the Luxembourg-based firm.

“The acquisition of KeyDrive is transformative for CentralNic, significantly increasing the Company’s scale and giving it significant extra firepower in the domain name industry to rival the traditional major players,” CentralNic CEO Ben Crawford said in a statement.

CentralNic says the deal will make it the 11th-largest registrar in terms of gTLD domains under management and the fifth-largest registry back-end in terms of TLDs managed (which will hit 118).

KeyDrive had 2017 revenue of $58.26 million and adjusted EBITDA of $5.87 million. Operating profit was $4.3 million.

CentralNic had 2017 revenue of £24.3 million ($32.2 million), adjusted EBITDA of £6.6 million ($8.7 million) and operating profit of £1.8 million ($2.4 million). These numbers do not include the £3.2 million-a-year SKNIC business, which CentralNic acquired right at the end of last year.

KeyDrive CEO Alexander Siffrin will become COO of CentralNic and one of its largest shareholders, owning 16.4% of the combined company’s shares.

The acquisition itself is fairly complex.

CentralNic will raise $16.5 million cash in a share placement and it will issue $19.3 million of shares to a holding company majority-owned by Siffrin. The remaining $10.5 million is performance related and may be paid in a combination of cash and shares, mostly shares.

It’s all subject to shareholder approval at an August 1 general meeting.

Assuming the deal closes, CentralNic says its plan is to become the “GoDaddy of Emerging Markets”, though what this means in practice is not immediately clear.

It does seem that there will be some job losses as the company rationalizes staffing across its various locations.

As far as technical integration goes, CentralNic’s registrars will migrate to KeyDrive’s platform and KeyDrive’s registries will migrate to CentralNic’s registry platform.

The potential for a deal was first revealed in March, after a leak. Trading in its shares was halted as a result, but resumed this morning.

Web.com to be acquired for $2 billion

Web.com is to go private in a deal valued at roughly $2 billion.

The company, which owns pioneering registrars Network Solutions and Register.com as well as SnapNames and half of NameJet, will be bought by an affiliate of Siris Capital Group, a private equity firm.

The cash, $25-a-share deal has been approved by the Web.com board but is still open to higher bids from third parties until August 5.

The offer is a 30% premium over Web.com’s 90-day average price prior to the deal’s announcement.

While Nasdaq-listed Web.com has briefly topped $26 over the last year, you’d have to go back five years to find it consistently over the $25 mark.

After ICANN nod, MMX buys .xxx

MMX has closed the acquisition of porn-focused ICM Registry, after receiving the all-clear from ICANN for the contract transfers.

The deal is worth roughly $41 million — $10 million cash and about $31 million in stock.

ICM runs .xxx from the 2003 gTLD application round (though it didn’t go live until 2011) and .porn, .adult and .sex from the 2012 round.

MMX, which now has 29 fully-owned TLDs and another five in partnerships, will now become roughly a quarter-owned by former ICM employees and its back-end provider, Afilias.

ICM president Stuart Lawley now owns 15% of MMX and is its largest shareholder.

CEO Toby Hall said in a statement to the markets that he has “identified a number areas of potential growth and synergy”.

The company noted that the deal increases the share of its revenue coming from the US and Europe, implicitly highlighting the reduction of its exposure to the volatile Chinese market, where .vip has been its biggest money-spinner to date.

ICM had something like 152,000 .xxx domains under management at the last count, but over 80,000 of those are reservations. It has about 92,000 names in its zone file currently.

The three 2012-round names are faring less well, with about 8,000 to 10,000 names apiece in their zones.

Somebody once jokingly told me that ICM stood for “Internet Cash Machine”, due to the perception that porn-focused names would sell like, well, porn. Just thought I’d mention that.