CentralNic Global Expansion Continues As It Acquires Australian Reseller TPP Wholesale
Posted in: Domain Names at 22/05/2019 19:28
The UK-based CentralNic Group has announced it’s entered a conditional agreement to acquire the Sydney-based TPP Wholesale, the leading platform for resellers of domain names and hosting in Australasia for A$24m from ARQ Group, formerly Melbourne IT.
TTP Wholesale is a carve out of certain trade and assets from ARQ Group, which has been gradually divesting itself of its domain name business. The acquisition is the next step in CentralNic’s strategy as a rapidly growing global consolidator in the recurring revenue domain name industry.
TPP Wholesale is Australasia’s leading domain name and hosting reseller platform business with around 14,000 reseller customers and 840,000 domains under management, including 19% of all com.au registrations.
This transaction is CentralNic’s third acquisition in 12 months, continuing its industry consolidation strategy and expansion into key markets globally. In August 2018 CentralNic acquired KeyDrive S.A., the German registrar and registry businesses, and a month later announced it had acquired the Romania and Brazil-focused registrar and domain hosting provider GlobeHosting Inc. In addition ICANN announced the bulk transfer of 679,840 domain names following the collapse of the registrar AlpNames.
“We are delighted to become the leading supplier to domain name and hosting resellers in Australasia through this highly earnings accretive acquisition,” said Ben Crawford, CEO of CentralNic. “We look forward to bringing the benefit of our global resources to our thousands of new Australian and New Zealand domain name reseller customers. The timing of this deal is propitious as it allows CentralNic to participate fully in the proposed launch of the new .au domain extension.”
TPP Wholesale will be an extension in Australia and New Zealand of CentralNic’s largest business unit, which supplies domain names to resellers globally including most of the world’s top ten domain name retailers by volume. CentralNic will provide TPP Wholesale customers with continuity of service, while also upgrading the service with new products.
The TPP Wholesale acquisition will also mark the first steps in CentralNic becoming a reseller of Amazon Web Services and Microsoft Office 365.
The total consideration is A$24m including taxes, to be paid in cash and by assuming certain liabilities of c. $1.6m AUD from the ARQ at completion. ARQ has not historically reported TPP Wholesale results as a stand-alone segment, however the Company has determined that stand-alone revenues and Adjusted EBITDA for the trade and assets to be acquired for the financial year ended 31 December 2018 were $17.0m AUD and $3.9m AUD respectively on an unaudited basis. Given the acquisition is a carve out from a listed entity, CentralNic in their announcement say they expect to incur a number of one-off integration costs of approximately $1.8m, of which $0.7m are expected to arise in CentralNic’s current financial year ending 31 December 2019. CentralNic expects the acquisition to be finalised by the end of June.
“The divestment of TPP marks another significant step forward in the evolution of Arq Group, as we continue to sharpen our focus on achieving our vision of becoming Australia’s leading digital solutions partner powering the growth of businesses, big and small,” said Arq Group CEO, Martin Mercer. “The sale will provide Arq Group with additional capital to reinvest into the growth of our digital services strategy.”
“The Group’s decision to extend its focus from domains and hosting to becoming a true digital partner for Australian businesses, resulted in the TPP reseller business being considered a non-core operation. The sale of TPP will enable the Group to accelerate its digital services growth strategy,with a clear focus on its key capabilities.”
“Having run a competitive process we are very pleased that CentralNic is the successful acquirer of TPP. CentralNic supply domain names and hosting services to resellers globally, including all of the world’s top ten domain name retailers by volume. CentralNic’s global expertise and leadership in the sector will greatly benefit TPP customers through future investment and commitment to the business.”