Register.com and Network Solutions to get married.
Two of the highest priced and oldest domain name registrars are getting married.
Web.com, which owns Register.com, will pay $405 million plus 18 million shares of Web.com stock as well as take on Network Solutions’ debt.
The cash portion of the deal will be funded with new debt: $600 million of First Lien Credit Facilities and $150 million of Second Lien Credit Facilities, as well as a $50 million revolver. The new debt will also pay off the remaining $84 million of debt from the Web.com acquisition of Register.com in 2010. After closing, the combined company will have $740 million of net debt.
Network Solutions is owned by a number of investors, primarily General Atlantic LLC.
The two domain name registrars have watched their market share suffer in favor of lower priced rivals such as Go Daddy, but have still managed to keep millions of domain names at higher prices. Typical registration prices at the registrars is about $35 per year. Their customers are less price-sensitive and often purchase full online presence packages.
The message from Web.com is clear: Register.com was a good acquisition for the company, so Network Solutions make sense as well.
I suspect we’ll see more consolidation in the registrar space over the next year.