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Centralnic Group PLC

CentralNic unveils transformational £16mln acquisition

It is buying privately-owned Instra Group, funded in part from a £10mln placing of stock with investors at 40p a share.

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Domain names are big business.

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Domain name specialist CentralNic (LON:CNIC) has unveiled a transformational deal to acquire an Aussie rival for almost £16mln (A$33mln).

It is buying privately-owned Instra Group, funded in part from a £10mln placing of stock with investors at 40p a share.

The purchase will extend CentralNic’s capabilities and “significantly increase” its retail offering.

Instra has strong recurring sales and high margins as well as being profitable and cash generative.

In the year to June 30 it posted pre-tax profits of just over £1mln (A$2.1mln) on turnover of £7.11mln (A$14.8mln).

The companies expect to be able to generate ‘synergies’ of £1.2mln annually from 2017.

CentralNic chief executive Ben Crawford reckons the addition of the new business, which he describes as a “robust and global”, will lift the firm’s revenue base by 70%.

“Today domain names are just as important as an intellectual property asset as trade marks and patents," he told Proactive Investors.

"Through services like instra.com and asiaregistry.com, Instra Group has made it possible for businesses to secure their domain names in every major country in the world, as well as under new top-level domains, including in Arabic, Chinese, Japanese and Russian.

“I have travelled the world looking for cutting edge companies to acquire, and Instra stood out among all the others.

"Many of the savviest businesses around the world are already using Instra as their one-stop shop for online brand protection.”

Instra offers three main services: domain portfolio registration for large corporates; domain names and web site hosting for small businesses; and a white label sales platform.

Desleigh Jameson, Instra's CEO, is expected to join the CentralNic Board following completion of the acquisition.

In a separate announcement, the AIM listed Internet platform business said it has appointed Iain McDonald as non-executive director.

McDonald is a specialist technology and e-commerce investor and is an advisor to the William Currie Group, a private family office founded by financier Bill Currie.

He has contributed to their strong track record in investing in early stage companies, which include investments in ASOS

Quick facts: Centralnic Group PLC

Price: £0.50

Market: LSE
Market Cap: £90.9 m
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Full interview: CentralNic triples revenue to 50m and lifts ebitda to 5m

CentralNic Group (LON:CNIC) has reported a tripling of underlying revenue and earnings and said it's confident that full-year results will be at around the top end of current market forecasts. CEO Ben Crawford dropped by Proactive London studios to also explain that the pipeline of future deals...

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