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January 20, 2017

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Here's the The Lowdown from DN Journal,
updated daily
to fill you in on the latest buzz going around the domain name industry. 

The Lowdown is compiled by DN Journal Editor & Publisher Ron Jackson.

Tucows Signs Definitive Agreement to Acquire Enom from Rightside for $83.5 Million

Tucows Inc. (NASDAQ:TCX, TSX:TC), a popular provider of network access, domain names and other Internet services, announced this morning  that it has signed a definitive agreement to acquire wholesale domain name registrar eNom from Rightside Group, Ltd. (NASDAQ: NAME). The transaction is expected to close later today.

Tucows will pay $83.5 million and the transaction is expected to be immediately 

accretive to earnings. The acquisition will be funded through an amendment increasing Tucows’ existing credit facility to a total of $140 million.

The acquisition of eNom will add 14.5 million domains under management and 28,000 active resellers to the Tucows portfolio. That will give Tucows a total network of over 40,000 resellers globally and 29 million domains under management, making it the second largest domain registrar in the world.

Tucows CEO Elliot Noss

Elliot Noss, Tucows’ CEO said, “This industry has changed so much since Tucows and eNom each launched wholesale registrar services over fifteen years ago and .com, .net and .org essentially represented the namespace. It is a lot more challenging and complex now. At the same time, it is more mature and much more competitive. Scale is absolutely critical. This is a rare deal that gives Tucows and its investors exactly that while offering an immediate cash on cash return.”

David Woroch, Tucows’ Executive Vice President of Domains, added, “For years, eNom and OpenSRS (operated by Tucows) have been the two leading registrars primarily focused on the needs of resellers. This focus means these businesses fit very well together. The acquisition keeps eNom resellers where they will be well understood, well valued and well served and creates tremendous value for Tucows and resellers on both sides through efficiency and scale.”

In addition to operating domain registrars eNom and Name.com, Rightside is one of the top operators of new gTLD registries. CEO Taryn Naidu said, “The divestiture of eNom creates a stronger alignment between Rightside’s vision, strategy and financial profile and we believe this is the best way to increase shareholder value. The market for new gTLDs is rapidly developing and the divestiture enables us to more intensely focus on our higher growth and higher margin businesses, where our Registry and Name.com businesses are leading the way with the new domains.”

Naidu added, “We would like to thank our eNom colleagues for their hard work in building such a well-respected business and for their dedication to Rightside.  We look forward to seeing their continued success and continuing to work with eNom as a valuable distribution partner as part of Tucows."

Rightside CEO Taryn Naidu

(Posted January 20, 2017)

 


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