screenshot of the Network Solutions news section
The announcement comes a full year after Web.com acquired Register.com in a high-profile, $135 million deal for the domain registration provider.
The acquisition will create an "end-to-end online solutions company with a clear path to $500 million in non-GAAP revenues," accorodng to the press release.
On a strategic level, the acquisition makes a lot of sense for Web.com since the two companies offer a comparable range of services aimed at the SMB market.
These services include web hosting, domain registration, web design, e-commerce solutions, online security products, SSL certificates, and search engine marketing and optimization.
Web.com said the combined company will be positioned to deliver "revenue growth in the low teens".
Upon closing, Web.com will pay Network Solutions $405 million in cash and issue 18 million shares of Web.com common stock. In addition, it will refinance the existing net debt of Network Solutions and pay certain fees.
"This transaction represents a unique opportunity to dramatically expand our scale, add further momentum to Web.com's already improving top line growth, and further expand our market share as the nationally recognized go-to provider of online marketing solutions specifically tailored to small and medium-sized businesses," said David Brown, chairman and CEO of Web.com. "Our integration strategy will be similar to our successful acquisition of Register.com, and we will be in a strong position to cross-sell and up-sell our services to Network Solutions' approximately two million retail customers and hundreds of thousands of wholesale customers. We believe this combination will provide significant long-term shareholder value as we grow our business, capitalize on synergies, improve our margins and generate substantial cash flow to invest greater resources in growth and branding initiatives."
The acquisition is expected to be completed in the fall, and at the close, General Atlantic and other current Network Solutions shareholders are expected to own about 37 percent of Web.com.
As part of the acquisition, Anton Levy, General Atlantic managing director and principal stakeholder in Network Solutions, will join the Web.com board of directors.
The combinted company is expected to earn revenue in the mid-$450 million range for 2011 and EBITDA of at least $120 million for 2011 before cost synergies and transaction expenses.
The combined companies have about 1,900 employees around the world and 3 million paying subscribers, which includes more than 9 million domains under management.
Article Source http://www.thewhir.com/web-hosting-news/080311_Web_Host_Webcom_Acquires_Rival_Host_Network_Solutions permits to republish here.
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