CentralNic Group plc (AIM: CNIC) this week announced Update on the acquisition of web services company, Team Internet AG for up to US$48 million and trading update for Q3 2019.
Zak Mir talks with Ben Crawford, CEO about this week's updates.
· Acquisition of leading domain name monetisation services provider, Team Internet
· US$48m total consideration payable, US$45m is cash, to be funded by an underwritten bond issue
· Expected to be immediately earnings enhancing and significantly accretive in the financial year ending 31 December 2020 before any synergies
· Acquisition a strong fit for CentralNic's stated strategy to derive recurring revenues from domain related technologies
· Significant opportunities to drive cross selling by expanding both customer base and product set
· Team Internet generated US$66.7m of revenue (unaudited) and US$10.6m of Adjusted EBITDA (unaudited) in the 12 months to 30 June 2019
· This acquisition takes the Group to US$198.2m of unaudited pro forma revenue and US$31.8m of unaudited pro forma EBITDA*
· Net debt expected to be US$76m following completion of the Acquisition. Net debt to EBITDA is expected to be 2.4x on completion and is expected to reduce to approximately 2x after the first full year of ownership
· The acquisition is expected to complete in the week commencing 23 December 2019, following the EGM of Matomy Media Group Ltd. ("Matomy"), the parent company of Team Internet
* Based on the latest available publicly announced financial statements of CentralNic and the companies acquired after CentralNic's latest balance sheet date of 30 June 2019
CentralNic Group Plc Trading Update Highlights
· Unaudited revenues of US$77.1m and adjusted EBITDA of US$13.1m for the period from 1 January to 30 September 2019
· The net debt position was US$35.9m as of 30 September 2019, reflecting the issuance of a EUR 50m bond on 3 July 2019 and continued strong cash generation
· The Group, prior to any contribution from the acquisition, continues to trade in line with the high end of analyst expectations
Ben Crawford, CEO of CentralNic, said: "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. It is another web-based recurring revenue business that will be significantly earnings enhancing for the financial year ending 31 December 2020."