CentralNic acquires domain reseller Hexonet

CentralNic told investors on Monday that, like itself, Hexonet had "a high level of recurring revenues" and "excellent customer retention" - recording revenues of €16.5m in 2018, representing a compound annual growth rate of around 8%, while underlying earnings came to roughly €800,000.

The AIM-listed company said the full consideration was subject to Hexonet being delivered with over €300,000 worth of ongoing cost reductions when compared to its 2018 cost base, and also noted that it would be filling staff vacancies budgeted at a further €300,000 with staff from Hexonet.

The consideration comprises a €7m payment at completion and a deferred payment of up to €3m on the first anniversary of completion, payable in cash or CentralNic shares at prevailing market price, at the company's discretion. The cash component of the acquisition will be funded by proceeds of the group's recently closed senior secured bond issue of €50m.

Chief executive Ben Crawford said: "We are delighted that the Hexonet reseller platform, expert staff and customers are becoming part of CentralNic, boosting not only our recurring revenues and profits, but also our market share and competitiveness.

"Added to our existing capabilities, the Hexonet acquisition makes us the clear global leader, combining two of the most technically advanced global reseller platforms in the domain industry, and the formidable teams that built and run them."

As of 0940 BST, CentralNic shares had dropped 3.20% to 60.50p.