Two of the bigger participants in the new gTLD world, Seattle-based Donuts and Rightside, are merging the companies announced Wednesday. The announcement comes almost a year after Rightside rejected a bid from Donuts, proposed in June 2016. It also follows the recent departure of Richard Tindal from Donuts, one of the original 4 co-founders.
The merger will see Donuts acquire Rightside for $10.60 per share in an all-cash tender offer, for an aggregate purchase price of approximately $213 million. The purchase price represents a premium of approximately 12% percent over Rightside’s average closing price for the 30-day trading period ending 13 June and a premium of approximately 22% percent over Rightside’s average enterprise value (excluding cash) for such period. The 2016 bid valued the company at $70 million in an all-cash deal.
Donuts is the largest manager of new generic top level domains with 197 new gTLDs and the fifth largest by domains under management with 2.209 million according to nTLDstats.com. Rightside is the second largest by new gTLDs with 40 and 642,000 DUM. The new company will have 2.851 million DUM and 217 new gTLDs, making it the largest by new gTLDs and fourth largest by DUM.
The Merger Agreement was unanimously approved by Rightside’s Board of Directors following a comprehensive review of strategic and financial alternatives that Rightside announced in the first quarter of 2017.
“We believe that this agreement offers a substantial cash premium to our shareholders,” said Taryn Naidu, Rightside chief executive officer. “We look forward to working closely with Donuts to consummate this merger.”
“Donuts and Rightside have a long history of working together, and we are delighted to take the next step with this transaction,” said Bruce Jaffe, Donuts chief executive officer. “We believe that the combined company will be well positioned to serve our registrar customers and the millions of businesses and individuals who are embracing new ways to brand their online identities.”
The merger/takeover will see Rightside become a wholly-owned subsidiary of Donuts, a privately-held company, and Rightside’s common shares will no longer be listed on any public market. It also follows a number of mergers and takeovers in the domain name industry at the registry level, as well as well as a number of registries seeking to expand their services.