AIM-listed NetBenefit paid 1.1m in cash and issued 2.9m shares for Netnames, which it will continue to run as a separate company.
NetBenefits predicts its annual turnover will double as a result of the deal as it will be able to cross-sell its additional services, which include site hosting and e-commerce and email services, to NetNames’ customer base, made up mostly of SMEs.
It also intends to make inroads in the US – where NetNames already has a relatively high profile – by managing domain names for large corporations and offering Intellectual Property consultancy. This is expected to bring in an additional $1.5-$2m a year.
Stewart Binnie, chairman of NetBenefit, says the consolidation of two of the UK’s leading domain name registrars will not only establish it as a market leader in the UK, but will strengthen its position to fight off increasing US competition.
NetNames was founded by Ivan Pope in 1995 and is one of the leading registrars for the .uk domain.
In addition to domain name registration, NetNames’ provides solutions for corporations wanting to create and protect their IP online. Pope says he believed the deal to be “the best possible outcome for NetNames”.
In the UK, one of NetBenefit’s fiercest rivals is Virtual Internet, run by Steve Miller, formerly of NetNames. He welcomed the deal and said it now put his company on a better footing as it reduced the real competition in the marketplace to just two players.