A shocking price tag for Melbourne IT’s brand protection business.
There’s money in online brand management.
Melbourne IT (ASX: MLB) announced today that it has sold its Digital Brand Services (DBS) division to Corporation Services Company (CSC) for A$152.5 million – which was 95% of the entire company’s market cap prior to the announcement.
Melbourne IT will still exist as a domain registrar.
The move builds CSC’s already large brand protection business in domain names. It also means that Melbourne IT’s new top level domain clients will now be working with CSC.
DBS was created in 2008 when Melbourne IT bought Verisign’s Digital Brand Management business for $50 million. Melbourne IT already had a brand management business, but the acquisition helped it become a larger player in the segment.
The stock market appears to have not been properly valuing Melbourne IT’s business segments prior to the sale. It will be interesting to see if public spin-offs of both Demand Media’s and Marchex’ domain businesses over the coming year unlock further unrealized value in the domain business.