Contact: Ben Kolada
Web.com is acquiring Web hosting and domain name registration vendor Network Solutions in a deal valued at $756m, including the assumption of debt. And we expect that Network Solutions’ owner couldn’t be more relieved. With flat revenue and customer attrition in recent years, Network Solutions’ private equity owner, General Atlantic (GA), wasn’t likely to find much interest for the portfolio company on Wall Street.
However, GA structured the transaction in such a way that – at least for now – it is enjoying a good day on the stock market. Terms of the deal call for just over a quarter of Network Solutions’ price to be covered by Web.com shares. (That will leave GA and other Network Solutions’ shareholders owning 37% of the combined company.) Web.com initially valued that chunk of equity at about $150m. On Thursday afternoon, the value of the 18 million Web.com shares heading to GA and other owners had soared closer to $200m. The reason? Wall Street liked the acquisition as well as Web.com’s second-quarter financial results. (We’ll have a full report on this transaction in tonight’s Daily 451 and 451 TechDealmaker sendouts.)