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CentralNic expects flat profit as revenue almost doubles

Kevin Murphy, February 4, 2019, Domain Registries

London-listed domain firm CentralNic today gave investors a sneak preview of its 2018 financial performance.

The company expects its profits at the adjusted EBITDA level to be up only slightly — from £6.6 million ($8.62 million) to £6.7 million ($8.75) — compared to 2017.

But revenue is expected to soar from £24.3 million ($31.7 million) to £42.5 million ($55.5 million), largely due to the impact of its merger with KeyDrive, which completed in August.

KeyDrive was the holding company for brands including the registrars Key-Systems, Moniker and BrandShelter, and the registry providers OpenRegistry and KSRegistry.

The Luxembourgish firm reversed into AIM-listed CentralNic in a deal, described as “transformative” for CentralNic, valued at up to $55 million.

Most of the company’s revenue now comes from the registrar part of the business, though the registry division is the more profitable.

CentralNic said today that “subscription products” are now roughly 90% of total revenue.

The company expects to save £1 million ($1.3 million) this year by migrating its old registrars over to the KeyDrive platform and migrating its new registries onto the CentralNic platform.

It has also appointed KeyDrive’s former CFO as CentralNic CFO, replacing Don Baladasan. Michael Riedl has also joined the board of directors, while Baladasan remains on the board as group managing director.

Full, audited financial results will be announced in May.

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.

MMX could announce acquisition this week

New gTLD registry MMX could announce plans to be acquired as early as this week.

The company told the markets last week that its delayed 2017 financial results would be announced in “early May”, along with the “conclusion of the strategic review” it has been teasing investors about for almost a year.

The “strategic review”, announced last May, is exploring “how MMX can participate in a broader industry consolidation” including acquisition or merger.

MMX said last week that “constructive discussions continue to progress”.

It has previously described the duration of the negotiations, initially slated to close last September, as “frustrating”.

Unlike AIM-listed rival CentralNic, which has confirmed it is in reverse-takeover talks with KeyDrive, MMX has not revealed which potential buyer(s) it has been talking to.

MMX, also listed on AIM, has a market cap of £69.3 million ($94.3 million) today.

In January, it informally reported that its 2017 billings are expected to be around the $15.6 million mark, allowing the company to hit operating profitability for the first time.

The company runs 25 new gTLDs solo and five more in partnerships with other companies, but by far and a way the best volume performer is .vip, which accounts for well over half of its registrations largely due to its resonance in China.

CentralNic and KeyDrive in merger talks

Kevin Murphy, March 14, 2018, Domain Registries

CentralNic and KeyDrive, two major European domain firms, are in merger talks, CentralNic confirmed this morning.

CentralNic said that the transaction, should it close, would be a “reverse takeover” of itself by KeyDrive.

That’s where a private company, in this case KeyDrive, reverses into a public one, in this case AIM-listed CentralNic.

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

London-based CentralNic is a registry provider for the likes of .xyz, recent acquirer of Slovakian TLD .sk, and owner of registrars Internet.bs and Instra.

CentralNic said: “CentralNic and KeyDrive Group believe that the combination of the two businesses would have strong strategic logic and economies of scale, and would represent an opportunity to create a group with advanced technology platforms delivering significant recurring revenues for every major customer type within the industry.”

If a deal should be struck, it would happen in the second quarter, the company said.

The announcement was made today after news of the talks leaked.

Trading in CentralNic shares has been temporarily suspended.

NCC sells Open Registry at huge discount

Kevin Murphy, January 6, 2017, Domain Registries

NCC Group has followed through on its promise to divest parts of its domain business, selling the Open Registry collection of companies at a huge discount to the original purchase price.

KeyDrive and a mysterious entity called Terrain.com SA have together acquired the companies for €3.75 million ($3.97 million).

That’s compared to the minimum of £7.9 million ($12 million) NCC originally paid just two years ago.

NCC said in a statement that the sold companies are:

  • Open Registry SA, a registry back-end provider with a handful of new gTLD clients.
  • ClearingHouse for Intellectual Property SA, aka CHIP, which provides software and billing support for the Trademark Clearinghouse.
  • Nexperteam CVBA, a tiny registrar.
  • Sensirius CVBA, the original Open Registry company, a new gTLD consultancy.

Missing from that list is Artemis, the new gTLD registry for .trust, which NCC separately acquired from Deutsche Post for an undisclosed sum in February 2014.

NCC is also keeping hold of its data escrow business, which is widely used by gTLD registries to comply with ICANN rules.

It’s not clear how the sold companies are being divided up between the two buyers.

KeyDrive is the Luxembourg-based holding company for the registrars Key-Systems and Moniker and other domain firms.

Terrain.com appears to belong to EuroDNS chair Xavier Buck, who was chair of Open Registry until NCC bought it, but the domain itself doesn’t seem to resolve right now.

NCC said that €2 million will be paid up front and €1.75 million will be deferred for 18 months.

US-based Moniker gets Euro data retention waiver

Kevin Murphy, September 11, 2014, Domain Registrars

ICANN has approved Moniker’s request for a partial waiver of the Registrar Accreditation Agreement based on European privacy law, despite the fact that the registrar is based in the US.

The data retention waiver for Moniker was one of a few granted to members of the KeyDrive group of registrars that were approved by ICANN yesterday.

KeyDrive is based in Luxembourg, but the waiver request was granted because complying with the 2013 RAA could violate German privacy law and Moniker’s data is stored in Germany.

ICANN said:

Registrar’s technical backend services provider as well as data storage and collection occur on servers hosted and operated in Germany, and is subject to German law. Accordingly, ICANN has determined that it is appropriate to grant Registrar a data retention waiver

Group members Key-Systems AG (a German company) Key-Systems LLC (an American company) also received waivers yesterday.

InternetX, part of Germany-based United Internet, and http.net Internet also had their requests approved.

The waiver process was introduced because the 2013 RAA requires registrars to store customer data long after their domains expire, which registrars’ lawyers say forces them to break local laws.

An EU directive implemented in many European countries says that companies cannot store personal data for longer than it is needed for the purpose for which is was collected.

SnapNames acquired by Web.com

Web.com has acquired domain name dropcatcher SnapNames for an undisclosed sum, according to press releases from it and former owner KeyDrive, confirming reports from Friday.

Web.com said the deal will be “immaterial” to its 2014 financial results.

The Nasdaq-listed company already owns leading registrars Network Solutions and Register.com. It’s also a new gTLD applicant, one of many companies having applied for .web.

KeyDrive acquired SnapNames, along with the registrar Moniker, from Oversee.net in 2012.

Just last week KeyDrive announced that Moniker, which with SnapNames had been managed by Craig Snyder, was getting a new CEO in the form of Key-Systems exec Bonnie Wittenberg.

Moniker gets a new CEO

Kevin Murphy, February 21, 2014, Domain Registrars

KeyDrive has appointed Bonnie Wittenburg, Key-System USA executive vice president, as the new CEO of sister registrar Moniker.

She replaces Craig Snyder, who was CEO of Moniker and SnapNames and remains CEO of SnapNames. Wittenburg keeps her EVP roles at Key-Systems.

“Through her expanded role she will drive cooperation and develop a synergistic relationship between the KeyDrive members,” the company said in a statement.

The KeyDrive stable also includes Key-Systems, NameDrive and KS Registry.

Wittenberg is a 15-year veteran of the domain name industry, with previous stints at Network Solutions and Iron Mountain.

KSRegistry takes over .gd but questions remain about two other hijacked ccTLDs

KSRegistry has been appointed the new registry operator for Grenada’s ccTLD after bad management at the previous operator led to the whole TLD being hijacked.

But the fate of two other hijacked ccTLDs — .tc and .vg — appears to be less certain, with significant confusion over who’s in charge at both.

One of them, at least, may still be “hijacked”.

But KSRegistry, part of the KeyDrive group, said today that it took over the technical management of .gd from AdamsNames (Amaryllis Investments Ltd) on May 1.

While a press release describes the change as a “redelegation” by ICANN’s IANA function, in fact it’s just a change of technical contact in the IANA database.

Grenada’s National Telecommunications Regulatory Commission remains the official, delegated manager of the TLD.

The hasty switch-over follows the alleged wholesale hijacking of the ccTLD by a disgruntled former employee of AdamsNames, who temporarily relocated it from the UK to Turkey.

The TLD, along with .tc and .vg, went AWOL in March after one Ertan Ulutas apparently took over the domain AdamsNames.net, the web site which was used by registrants to manage their names.

For a couple of weeks the site remained in the hands of the alleged hijacker, and all the while the AdamsNames.net site presented itself as the official registry manager.

KSRegistry was at the time the appointed back-end provider, appointed last year, for AdamsNames.

Due to the period of confusion, KSRegistry said today that the integrity of registration data in .gd may have been compromised, and that the zone will be “frozen” until May 21.

KSRegistry said in a statement:

While the .GD zone is frozen, no registrations, modifications, transfers, deletions or renewals can be made until the zone file has been fully reviewed and confirmed as valid and complete. Expired domains which are still in the zone can explicit be set to be either deleted or renewed prior to the reactivation of automated domain deletion function on May 21. Contact and nameserver updates can be done by each registrar for the domain names in its portfolio once the ServerUpdateProhibited status is removed. The NTRC and the KSregistry GmbH intend to resolve the discrepancies in the registration data with the .GD accredited registrars until May 21, 2013.

Getting rid of AdamsNames seems like a smart move by Grenada.

While AdamsNames has not been accused of any wrongdoing, allowing its TLDs to get hijacked, putting many thousands of domains at risk, certainly smacks of incompetence.

And the current status of .tc and .vg is unclear enough that I’d advise extreme caution when doing business with either TLD until further notice.

According to IANA records, .vg (British Virgin Islands) still has AdamsNames listed as the technical manager, but there have been significant, dodgy-looking changes at .tc recently.

Notably, references to AdamsNames as technical contact and official registration site for the ccTLD have been removed and replaced with those for a couple of new companies.

TLD AS (based in Turkey) and Meridian TLD (based in the British Virgin Islands) have been named as technical contact and registration site for .tc respectively.

Also, a name server for .tc that was operated by RIPE (a respectable organization), was also removed and replaced with one from zone.tc, a domain controlled by Meridian TLD, in early April.

All the name servers for .tc, and all but one of the name servers for .vg, are now on domains controlled by Meridian.

On the face of it, it looks almost legit. Meridian’s web site even states that its representatives were at the ICANN meeting in Beijing a month ago.

But according to AdamsNames, Meridian is actually run by Ulutas (the alleged hijacker) and at least two other people, and the two other people showed up in Beijing pretending to represent AdamsNames.

AdamsNames said on its web site:

We have to state frank and clear that neither Ayse Ergen nor her companion are authorised to represent or to act on behalf of AdamsNames Limited. By posing as employees of AdamsNames, the group of criminals around Ertan Ulutas, newly also known as “Meridian TLD Corp.”, continues its efforts to hijack the business of AdamsNames (run since 1999) by underhand means.

ICANN/IANA, according to AdamsNames, was aware of its complaints about Meridian from late March, which was before it made the changes that gave Meridian effective control over .tc.

Right now, it looks disturbingly like the alleged “hijacker” has actually managed to not only take over operations for at least one entire ccTLD but also to make it official.

Key-Systems adds parking API to RRPproxy

Kevin Murphy, September 10, 2012, Domain Registrars

Top-ten registrar KeyDrive has delivered on a major piece of integration work following the merger of Key-Systems and NameDrive last year.

Key-Systems today announced that its RRPproxy reseller platform now has API commands that enable its resellers — and in turn their registrants — to easily park domains with NameDrive.

The new commands allow entire domain portfolios to be parked in bulk, according to the company.

Key-Systems and NameDrive formed KeyDrive in July 2011. The company also acquired Moniker and SnapNames earlier this year.

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