Neustar to Acquire .CO Internet S.A.S.; Terms Undisclosed

.CO Internet logoNeustar has announced it has entered into a definitive agreement to acquire .CO Internet S.A.S. and certain associated assets. .CO Internet is the exclusive operator of the worldwide registry for the .co ccTLD, which has been rebranded as a gTLD.

Since its global relaunch in 2010, registrations have grown to more than 1.6 million in over 200 countries and territories worldwide. Neustar has an existing partnership with .CO Internet to provide registry services and infrastructure support for .co extensions, the ccTLD assigned to Colombia.

“The acquisition of .CO Internet is a natural fit for us given our successful partnership over the past four years and our domain name expertise,” said Lisa Hook, president and CEO of Neustar. “By combining .CO Internet’s innovative domain marketing capabilities with Neustar’s distribution network and technical resources, we will be able to broaden our registry services and the .co brand worldwide, while creating shareholder value.”

The acquisition of .CO Internet expands Neustar’s registry services, which maintains the .biz and .us TLDs and has been selected to provide services for up to 350 new gTLDs.

To provide perspective, .CO Internet exited 2013 with an annual revenue run-rate of $21 million. However, business combination accounting principles require Neustar to adjust the acquired deferred revenue to fair value. This adjustment to fair value often results in a write-down of deferred revenue that will reduce future revenue recognised as the services are performed, typically over a one year period. During 2013, Neustar recorded $4 million in revenue for its role as the back-end provider for .CO Internet, which will be eliminated upon consolidation. In addition, results for the first quarter of 2014 will include pursuit costs associated with this transaction.

The acquisition is subject to standard closing conditions and is expected to close within one month. Following the acquisition, .CO Internet, as a wholly-owned subsidiary of Neustar, will continue to manage the .co domain extensions from its headquarters in Bogota, Colombia.