Web.com buying Register.com for $135 million
Web.com Group Inc. announced today an agreement to buy Register.com for $135 million, a deal that will increase Jacksonville-based Web.com’s business by 80 percent.
New York-based Register.com is a privately-held company that provides Internet domain name registration and website design and management services. Web.com also provides website development services for businesses.
“The acquisition of Register.com is highly synergistic from a products and go-to-market perspective, and we believe the financial characteristics present a significant opportunity for Web.com to drive shareholder value,” Web.com CEO David Brown said in a conference call with analysts.
“Register.com provides essential tools that small businesses need to build and manage their online presence, which is a perfect complement to Web.com’s focus on providing high-value added online marketing solutions Register.com CEO Larry Kutscher said in a news release. Brown said Register.com has about $80 million in annual revenue, while Web.com has about $100 million. In addition to adding 80 percent more revenue to Web.com, he also said the deal would more than double the company’s earnings before interest, taxes, depreciation and amortization after realizing “cost synergies.” But he didn’t identify any planned expense reductions.
He said the combined company will have more than 1,100 employees in the U.S. and Canada.
Brown said Web.com has completed 10 acquisitions over the last nine years. That includes a 2007 merger — when the company was known as Website Pros — with Atlanta-based Web.com that doubled the size of the company. After the merger, Website Pros changed its name to Web.com and kept the headquarters in Jacksonville.
Web.com said it will finance the $135 million purchase price through a combination of cash and long-term debt.
Brown said one reason the company is able to make the deal is because “the challenging economic environment brought valuation levels down to attractive levels.”
“Our team has been working hard to identify opportunities for Web.com to turn the short-term challenges of the economic environment into significant upside opportunity for our shareholders by creating a much stronger company for the long-term. Today’s announcement is consistent with this strategy,” he said.