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Rightside Group, Ltd. (NASDAQ:NAME) and Donuts Inc., today announced that the two companies have entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Donuts will acquire Rightside for $10.60 per share in an all-cash tender offer, for an aggregate purchase price of approximately $213MM.
The purchase includes the 40 New gTLD extensions that Rightside is currently operating (.news, .live, etc.) and the Name.com domain name registrar. Rightside sold eNom on January to Tucows for $76.7 million.
The purchase price represents a premium of approximately 12% percent over Rightside’s average closing price for the 30-day trading period ended June 13, 2017 and a premium of approximately 22% percent over Rightside’s average enterprise value (excluding cash) for such period.
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.”
Pursuant to the terms of the Merger Agreement, the transaction will be completed through an all-cash tender offer, and closing is contingent upon tender of more than 50 percent of outstanding Rightside common shares, the receipt of certain regulatory approvals and other customary closing conditions.
The transaction does not have a financing condition and is currently expected to close during the third quarter of 2017. Following the transaction, Rightside will 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.
Barclays Capital Inc. is serving as financial advisor to Rightside. Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as Rightside’s legal advisor. Silicon Valley Bank is providing a credit facility to Donuts as part of this transaction. Perkins Coie LLP is acting as Donuts’ legal advisor.
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Worst news ever for domaining!
Why?
Totally predictable. In fact, I predicted it at the time of the spin-out of Enom — see comments here:
http://domainnamewire.com/2017/01/20/tucows-acquires-enom-rightside/
The next move seems like the (imminent) sale of the Donuts TLD rollup. My bet is on Amazon but Microsoft and Google would be in the mix if that became a process.
Anyway, nice work to Bruce and team on completing Act 2 of the 4-Act Play starring Amazon with Donuts as Belle of the Ball dressed for success.
Sounds like a plan…
First they will sell name.com to ??? and their domain name portfolio to GoDaddy.
Godaddy is smart enough not to take on those gtld’s they will not pay for them. This deal made sense, they can cut organization costs drastically, where they go from here really depends.
My guess is large shareholders have seen the top, hope the public hasn’t, and will look to exit it like a tech unicorn of sorts.
You mean that Donuts will go public.
If they go public , could be a game changer for the new G’s … More marketing dollars . More awareness . More put into use .
Pfffft. Yeah righdside changed the game when it went public.