Web.com today announced that it will acquire the privately-held domain name registration service Register.com for $135 million (£91 million).
Register.com has been around since 1994, when it was known as Forman Interactive, and has over 800,000 customers, giving Web.com a substantial increase in its subscriber base. David Brown, President and CEO of Web.com said that the deal “represents a substantial cross-and up-sell opportunity for Web.com.”
“The acquisition of Register.com will be a transformative event for Web.com as we expect to expand our non-GAAP revenue base by over 80 percent and more than double our adjusted EBITDA run rate after realizing cost synergies that have already been identified,” Brown said. “In addition to expecting a meaningful, positive impact on our non-GAAP EPS, Web.com’s significantly enhanced scale and cash flow will provide the company with far greater resources to invest in sales and marketing programs to drive long-term growth.”
The merging of the two companies will result in what Web.com expects to be an annualized non-GAAP subscription revenue of over $180 million (£121 million), over 1 million paying subscribers, over 1,100 employees in the U.S. and Canada, and a wide range of small and medium business partners.
Larry Kutscher, CEO of Register.com, said: “Today’s announcement is a significant event for our customers and prospects as our combined company will have a unique combination of scale, product breadth and distribution to address the $10 billion online services market for small businesses.”
Web.com will finance the deal with a combination of cash and long-term debt, but it expects to make $36 million (£24 million) this year after the acquisition of Register.com, so it may not be paying interest for very long.