CentralNic Group plc has announced they have acquired the web services provider, Team Internet AG Germany, a leading domain name monetisation services provider, for $48 million ($45m in cash and $3m deferred), with the acquisition expected to immediately benefit the company financially.
The acquisition means CentralNic will become one of the world’s leading providers of domain name monetisation services with a proprietary platform that enables domain name investors to generate recurring advertising income from their assets.
“The acquisition of Team Internet is a natural extension of CentralNic’s domain sales business and a major step in adding domain related web services to CentralNic’s service offering,” said Ben Crawford, CEO of CentralNic. “It is another web-based recurring revenue business that will be significantly earnings enhancing for the financial year ending 31 December 2020.”
CentralNic has been on an acquisition splurge in recent years having acquired the German/Canadian registrar Hexonet and Ideego, a New Zealand registrar and the Australasian registrar TPP Wholesale, all in 2019. Other acquisitions have included the domain name portfolio of failed discount registrar AlpNames also this year while they acquired GlobeHosting Inc., a leading registrar and hosting provider in multiple markets including Romania and Brazil and the German Key-Systems, KeyDrive, both in 2018 as well as the Australasian instra group in 2015.
Team Internet is based in Munich, Germany, and has been around for 10 years. According to CentralNic’s announcement of the acquisition, Team Internet experienced an increase in revenues in the year ended 31 December 2017 due to the collapse of a competitor. Following a period of rationalisation and focus on retaining high quality customers, Team Internet’s revenues have reduced to levels that are stable and highly recurring in nature. From this revised base, Team Internet has returned to month on month revenue growth in Q3 2019.
Team Internet has approximately 35,000 individual customers signed to rolling contracts to monetise a total of more than 20 million domain names using Team Internet’s proprietary technology for matching domain names with the highest paying advertisers. These contracts earn revenues for Team Internet on a monthly recurring basis with high levels of retention.
The acquisition will add an additional 40 staff in Germany, shifting CentralNic’s critical mass with almost 200 engineering and other staff members based there. Team Internet is an extremely efficient automation-focused company which derives around $1.6m in revenues per staff with CentralNic’s focus being on opportunities to grow the business through CentralNic’s existing global sales and marketing networks and by bundling and cross-selling as opposed to cost savings. The Directors believe that domain monetisation is a service that could potentially be bundled with an estimated 30% of all domain name registrations. This represents a significant opportunity to the Group as CentralNic currently has 18.6 million domains under management as of 30 June 2019.