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Domain name bods NetNames netted by CSC Global
HgCapital offloads loss-making outfit for undisclosed sum
Domain biz NetNames has been flogged to US biz services outfit CSC Global for an undisclosed sum.
Private Equity biz HgCapital has decided to offload NetNames after taking the publicly-listed outfit private in autumn 2011 for £153m, but it said little else about today's transaction.
The deal isn't a massive surprise, as we noted, self-billed turnaound expert Steve Vaughan – the bloke who dressed up Phoenix IT Group for a sale – was parachuted into NetNames in January to improves its fortunes.
According to a UK Companies House filing for the year ended 2015, London-based NetNames recorded flat revenue of £53m. However, loss before tax climbed to £20.89m, up from a £19.48m loss in the previous year.
Philip Carse, analyst at Megabuyte, said when NetNames – formerly GroupNBT – went private it had a relatively unblemished track record of growth and profitability. However, he said since then corporates have simply not adopted the multitude of generic top-level domains (gTLDs) expected.
But Carse said NetNames has not been alone in its lower-than-expected domain name business, adding that many web hosters have also been hit by slower gTLD demand.
"Whilst momentum does seem to be building behind gTLDs (for example as referenced by AIM-listed CentralNic and Minds & Machines), it is not clear that this demand is from NetNames’ corporate clients," said Carse.
"In this context, we assume that CSC’s offer was sufficient for HgCapital to draw a line under NetNames ownership approaching the fifth anniversary, whilst for CSC it is too small a deal to even bother reporting."
It is very unusual for private equity houses to not shout about a divestment in their portfolio, unless of course it hasn't been massively successful.
"Corporation Service Company is thrilled to be moving forward with the acquisition of NetNames," CSC Global spokeswoman Laura Crozier told us.
"We are excited by a future in which we can bring together our combined expertise to help companies worldwide protect and promote their brands in the digital marketplace. While we will not be providing further comment on the acquisition at this time, we will continue to focus our attention on providing the excellent service our customers have come to know and expect from CSC." ®