Herndon, Virginia is famous within the tech world because it is effectively the hub of the Internet. This is because a Herndon-based company, Network Solution, has held a long-standing contract to manage the Domain Name Servers used by the Internet. If you want to create or decommission a web domain, like oakhillva.com, then whether you know it or not it must be updated in the master domain name register published by Network Solutions, Inc.
That is about to change because Network Solutions, which has been doing the work since at least the 1990s, has been acquired in a $405M deal by web.com.
Web.com, a leading provider of internet services and online marketing solutions for small and medium-sized businesses (SMBs), and privately-held Network Solutions, a leading provider of website services, online marketing and global domain name registration focused on the needs of SMBs, today announced the signing of a definitive agreement for Web.com to acquire Network Solutions.
The transaction will create a leading end-to-end online solutions company with a clear path to $500 million in non-GAAP revenues as it focuses on providing web services to SMBs, a market estimated to be larger than $19 billion. Web.com believes its combined company will be positioned to deliver non-GAAP revenue growth in the low teens, with non-GAAP earnings per share and unlevered free cash flow growth in the mid-teens to 20 percent range over the next three to four years as revenue and cost synergies are realized. In particular, under current debt pricing terms, the transaction is expected to be at least 20 percent accretive to the $1.22 per share current First Call consensus estimate for 2012, with significantly greater accretion in 2013.
Under the terms of the agreement, upon the closing, Web.com will pay Network Solutions $405 million in cash and issue 18 million shares of Web.com common stock, in addition to refinancing existing net debt of Network Solutions and paying certain fees. Network Solutions is currently majority owned by General Atlantic LLC, a leading global growth equity firm.