Consolidation of Domain Registrar Market Continues As Web.com Swallows Ailing Webcentral

The ailing Webcentral Group, which has seen its stockmarket value plummet on the Australian Stock Exchange over the last 16 months, has been swallowed up by the Web.com Group which sees the end of Australian ownership of the country’s first domain name registrar, Melbourne IT.

Melbourne IT was known for premium pricing aimed at businesses, they currently offer .com and .org domain names for A$70 per year, has had a rough few years. It was founded in 1996 and claims to have been the first Australian domain registrar back in 1999. The company evolved from Melbourne IT Group to Arq Group with the acquisition of Infoready and Outware and expansion into Enterprise Cloud, Mobile App and Data Analytics solutions. Then with the divestment of their Enterprise BU in 2020, they became Webcentral Group. Today they now incorporate the Netregistry, Melbourne IT and WME brands to make up Webcentral with approximately 330,000 customers providing domain names, web hosting and digital marketing services.

But the stock market didn’t like this move. From July 2010 to May 2015, the share price (ASX: WCG) generally traded within the range of A$1.00 to $1.50. The share price then gradually rose, then rapidly from January to December 2017 where it peaked at $3.57 then plummeted in April 2018 to be worth $0.099 per share today.

The offer from Web.com is a 56% premium to the closing share price on 10 July of A$0.064 per share and a 21% premium on the 30-day VWAP to 10 July 2020 of A$0.083 per share

The sale comes after a strategic review in 2019. Webcentral received interest from a wide variety of strategic and financial buyers and due diligence was undertaken by multiple bidders. The completion of the first phase of the Strategic Review resulted in the divestment of Webcentral’s Enterprise division in March 2020. Today’s announcement of the Scheme represents the completion of the Strategic Review.

Webcentral now joins Web.com’s stable of brands including Network Solutions, Register.com, 1ShoppingCart, Name Secure and SnapNames.

The acquisition continues an ongoing trend of consolidation in the industry as groups like CentralNic, Web.com, Tucows and others rapidly expand, buying up smaller and occasionally ailing companies around the world.

“The Webcentral acquisition further complements Web’s continued commitment to providing market-leading web presence solutions to customers across the globe,” said Sharon Rowlands, CEO and president, Web.com Group, in a news release announcing the acquisition. “Now more than ever, companies need reliable online solutions and partners that deliver results to support ever-evolving business needs. Webcentral is a natural fit for our family of leading web technology brands and a proven long-standing partner to its customers.”

“Web.com Group and Webcentral share a common vision of providing technologies and digital growth solutions for small to medium enterprises. We partner with businesses to get online and unlock the potential of their digital footprint,” said Andrew Reitzer, Chairman, Webcentral Group in the news release. “We’re excited to join the Web.com Group family for the enhanced solutions for every step of their digital journey that the joint expertise will provide our customers.”

“Joining forces with Webcentral demonstrates our dedication to expanding in the region,” said Mark Evans, CEO of Dreamscape Networks. “Together, with the combined brands and resources of Web.com Group, Dreamscape Networks and Webcentral Group, we’re bringing more robust and innovative online solutions and a comprehensive product portfolio to the Australian market, while continuing to provide Best-in-World service.”

“We look forward to welcoming Webcentral to the Web.com Group,” said Tyler Sipprelle, principal at Siris Capital and director at Web.com Group. “As a global, multi-brand web technology business, we believe Web.com Group has much to offer businesses seeking an online presence strategic partner to support their next stage of profitable growth.”

The transaction is expected to close in late 2020 subject to the satisfaction of shareholder and regulatory approvals and other customary closing conditions.

Leave a Reply

Your email address will not be published. Required fields are marked *