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Year in Review: MMX acquires .XXX

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Adult top level domain company was one of many acquisitions in the domain business during 2018.

domain name company acquisitions with stock board

MMX, also know as Minds + Machines, is a new top level domain name company with a portfolio of strings such as .beer, .miami and .VIP. It’s publicly traded on the London AIM market (MMX), so it faces the daily pressure of being a public company in a business that is still seeking its footing.

It underwent a strategic review over the past year to see if it should sell itself of bulk up. It chose the later.

In May, MMX announced that it was acquiring ICM Registry for $10.0 million in cash and 225 million shares, which were valued at $31.0 million at the time of the announcement.

ICM registry isn’t your run-of-the-mill top level domain registry. Its domains are adult-themed including .xxx, .sex, .adult and .porn.

While the domains are controversial, the move will shore up MMX’s earnings and add stability to its income statement. This gives the company breathing room.

ICM started its life with a hard-fought battle to get .XXX. The domain was a sponsored top level domain introduced in 2011. The timing was good because it didn’t face competition from new TLDs.

There were three other notable acquisitions during the year.

CentralNic, another domain company traded on the London AIM (CNIC), bought KeyDrive for $55 million.

Private equity group Abry Partners bought new TLD company Donuts in a heated bidding war.

And Neustar bought out Verisign’s (NASDAQ: VRSN) security business that includes things like DDoS protection. The deal will be for somewhere between $50 million and $120 million depending on customer migrations.

Shareholders approve KeyDrive acquisition; deal to close tomorrow

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Long-awaited merger will be completed tomorrow.

Domain name company CentralNic (AIM:CNIC) held a shareholder meeting this morning at which shareholders approved the company’s acquisition of KeyDrive S.A. With the shareholder approval, the company will complete its acquisition of Keydrive tomorrow morning.

The cash-and-equity deal will give CentralNic a much bigger position in the domain registration business including the Key-Systems platform and retail registrar Moniker. CentralNic already owns retail domain name registrars Instra and Internet.bs.

KeyDrive grossed $58.26 million in the 2017 fiscal year. CentralNic’s top line was £24.3m in 2017 (about $32M USD at today’s exchange rate).

CentralNic has been growing largely by acquisition in recent years. At the general meeting, shareholders rejected a measure to streamline future acquisitions by giving CentralNic advanced permission to issue shares to non-shareholders without having to gain the specific agreement of existing shareholders.

CentralNic scoops up KeyDrive for up to $55 million

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Deal includes cash and share consideration with earnout that could make it a $55 million total price tag.

CentralNic (AIM: CNIC) announced today that it has agreed to acquire KeyDrive S.A. for up to $55 million.

The deal includes initial consideration of $35.8 million, made up of $16.5 million in cash and the rest in shares of CentralNic. That equals an enterprise value of $44.5 million after considering debt and other assumptions.

An additional $10.5 million will be paid as an earnout, with at least 15% of that in cash.

KeyDrive is the parent company of Key-Systems, Moniker, BrandShelter and other domain name brands. In the 2017 financial year, it grossed $58.26 million and had an adjusted EBITDA of $5.87 million.

CentralNic is a registry services provider and owns retail registrars including Instra and Internet.bs.

Merger talks started no later than the first quarter of this year.

CentralNic reports 2017 earnings, merger with KeyDrive still in the works

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Company reports revenue increase in 2017 and hopes to merge with KeyDrive in Q3.

Domain name company CentralNic (London AIM: CNIC) published its 2017 annual report (pdf) today.

Topline revenue increased from £22.1m in 2016 to £24.3m in 2017. Profit after tax was basically flat at £1.0, but the company’s Adjusted EBITA measure grew from £5.5m to £6.6m.

CentralNic divides its business into three groups:

Retail – domain name registrars such as Instra and Internet.bs
Wholesale – registry services, such as managing the back end for .xyz
Enterprise – mostly premium domain name sales, but also corporate domain management and dot-brands

Revenue grew in the retail and wholesale divisions but slipped in enterprise. CentralNic has been on a premium domain hamster wheel that the company admits is running out of energy.

On the wholesale side, revenue growth came mostly from .xyz and Radix’s top level domains.

The company renegotiated its contract to run .xyz. It extended the contract until 2032 and structured it as a flat-fee agreement, with some increases possible based on volume.

CentralNic completed its acquisition of Slovakia’s .sk country code by buying SK-NIC on December 5, 2017. This contributed £0.3m of revenue for the 26 final days of the year. That business has nice margins; the adjusted EBITA margin was 79% for that period.

The company said merger discussions with KeyDrive are continuing and it hopes to complete the combination in Q3 of this year.

It also said it plans to offer online security and brand protection services to its corporate clients.

CentralNic and KeyDrive look to merge

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Two domain companies in talks to combine.

CentralNic and KeyDrive are in merger talks, CentralNic disclosed today.

CentralNic is both a registry services provider and a registrar, which owns Instra and Internet.bs. It is one of (if not the) largest new top level domain name back end by domain volume thanks to .xyz and Radix. KeyDrive is the parent company of Key-Systems, Moniker, BrandShelter and other domain name brands.

The goal is to complete a merger by the end of next quarter.

It would qualify as a “reverse takeover” on London AIM rules. As a result of the news, trading in CentralNic’s stock (AIM) has been suspended.