SEC filings show valuation of Rightside business and disclose deal value of registry services.
There are a couple interesting tidbits in SEC filings for Donuts acquisition of Rightside (NASDAQ:NAME) that are worth sharing as they could be important to companies in the domain name industry.
The first involves how much Donuts is actually paying for Rightside’s assets. The purchase price is $213 but Rightside has a lot of cash on hand after selling Enom and its half of NameJet to Tucows earlier this year. In fact, a draft of the acquisition agreement required Rightside to have $83 million of cash in hand at the expiration of the offer. While that number might have been negotiated again later, its inclusion in the tender statement suggests that’s about what the final number will be.
That means Donuts’ actual outlay for Rightside’s assets net of cash is about $130 million excluding deal costs of roughly $10 million. So the registry business (40 TLDs plus registry services), Name.com and the Aftermarket business (about 300k domain names and a parking business) were valued at $130 million.
The other figure is much smaller but might be relevant to domain registries. During the first five months of this year, Donuts paid Rightside $0.8 million for Rightside providing registry services for Donuts 200 top level domains. In the past couple of years the total deal value for this registry services agreement has been less than 1% of revenue, so likely in line with under $2 million per year.
Of course, Rightside and Donuts have always had a unique relationship given their partnership on new TLDs. Also, no other new TLD company has the scale of Donuts when it comes to number of TLDs. Still, this figure could give some indication of the current value of providing technical registry services.
By the way, Name.com’s wholesale fees paid to Donuts for selling Donuts new TLDs in the first five months of the year came in at $0.7 million.