Web.com has just inked a deal to buy out Network Solutions for its catalog of online services, products and domain name registry.
Web.com has agreed to pay $405 million in cash and issue 18 million shares of Web.com common stock for Network Solutions. Web.com will also take on the task of refinancing Network Solutions’ current debts. Current Network Solutions shareholders will also receive a 37 percent stake in Web.com.
Founded in 1979, Network Solutions touts itself as a pioneer in the field of domain name registration. Today, the company manages over 7 million domains, 3 million email addresses and more than 400,000 websites. Additional amenities that will soon belong to Web.com include web site design and hosting support, e-commerce and online security solutions, SSL certificates, as well as search engine marketing and optimization.
Thus, with the extra assets, Web.com has several goals outlined with this purchase. The primary one is to create the largest online solutions company worldwide for the “$19 billion web services” SMB market with a combined non-GAAP revenue in the mid-$450 million range for 2011. Web.com also expects its customer base to triple to approximately 3 million subscribers.
Other objectives focus on synthesizing services from both companies:
With the infusion of Network Solutions’ two million retail customers and hundreds of thousands of wholesale customers, Web.com will have a tremendous opportunity to cross-sell and up-sell its online marketing, Facebook, mobile and web services offerings. In addition, Web.com’s current approximately one million subscribers will be offered a number of Network Solutions products and services that are complementary to Web.com’s product suite.
The deal is expected to be approved and close this fall.
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