Tucows Sells Afilias Stake for $7.4 Million
Wednesday, November 5th, 2008
Registrar continues to divest of non-core assets.
Domain registrar Tucows has sold its stake in domain name registry Afilias for $7.4 million. Tucows owned 7.38% of Afilias, which pegs a valuation on the registry of about $100 million. However, the payments to Tucows will be spread across the next 13 months with $3.2 million today; $2.1 million in June 2009; and $2.1 million in December 2009.
Tucows has already sold off its web hosting business and recently launched a site to sell some of its company-owned domain names. Its portfolio of domain names, many of them acquired after customers failed to renew them, likely represents its biggest opportunity for revenue growth.
Afilias is the registry for .info, but also provides registry “backbone” services for other top level domain names, such as .org. (The registry for .org is Public Interest Registry). Afilias is in a good position to grow with ICANN’s new top level domain name release as TLD applicants will need a technology provider such as Afilias.
As of June 30, Tucows had less than $3 million in cash on its balance sheet. However, it had significant other current assets.
Shares in Tucows (AMEX: TCX) are up 4 cents to $.37 per share as of this posting. That’s up nearly 13% so far today, but current shareholders have had a long way down over the past year.
They sure seem to be destroying long-term company assets in the name of short-term EBITDA.
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