CNIC.L Regulatory News (CNIC)

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20 May 2019

CentralNic Group plc

("CentralNic" or "the Company" or "the Group")

Acquisition of TPP Wholesale

CentralNic Group plc to acquire the leading Australian and New Zealand domain name and hosting reseller business TPP Wholesale for $24m AUD

CentralNic Group PLC (AIM: CNIC), which sells subscription internet services to businesses globally, announces it has entered into a conditional agreement to acquire the Sydney-based business TPP Wholesale, the leading platform for resellers of domain names and hosting in Australasia for a headline consideration of $24m AUD (the 'Acquisition').

About TPP Wholesale

TTP Wholesale is a carve out of certain trade and assets from ARQ Group Limited (ASX: ARQ) ("ARQ"), a company listed on the Australian Securities Exchange. The acquisition is the next step in CentralNic's strategy as a rapidly growing global consolidator in the recurring revenue domain name industry.

TPP Wholesale is Australasia's leading domain name and hosting reseller platform business with around 14,000 reseller customers and 840,000 domains under management, including 19% of all .com.au registrations.

TPP Wholesale will be an extension in Australia and New Zealand of CentralNic's largest business unit, which supplies domain names to resellers globally including most of the world's top ten domain name retailers by volume. CentralNic will provide TPP Wholesale customers with continuity of service, while also upgrading the service with new products.

The TPP Wholesale acquisition will also mark the first steps in CentralNic becoming a reseller of Amazon Web Services and Microsoft Office 365.

Information on the Acquisition

The total consideration is $24m AUD including taxes, to be paid in cash and by assuming certain liabilities of c. $1.6m AUD from the ARQ at completion. ARQ has not historically reported TPP Wholesale results as a stand-alone segment, however the Company has determined that stand-alone revenues and Adjusted EBITDA for the trade and assets to be acquired for the financial year ended 31 December 2018 were $17.0m AUD and $3.9m AUD respectively on an unaudited basis. Given the acquisition is a carve out from a listed entity, CentralNic expect to incur a number of one-off integration costs of approximately $1.8m AUD, of which $0.7m AUD are expected to arise in CentralNic's current financial year ending 31 December 2019.

The acquisition is conditional, inter alia, on a financing condition. CentralNic is in advanced talks with debt providers and the condition is expected to be satisfied towards the end of June. Further details are to be announced soon.

The CentralNic Board expect the acquisition to be immediately earnings enhancing and that it will result in double digit earnings accretion for the financial year to 31 December 2020. The Board also believes there is significant scope for cost synergies following successful completion of integration into CentralNic.

This transaction is CentralNic's third acquisition in twelve months, continuing its industry consolidation strategy and expansion into key markets globally.

Ben Crawford, CEO of CentralNic, said: "We are delighted to become the leading supplier to domain name and hosting resellers in Australasia through this highly earnings accretive acquisition. We look forward to bringing the benefit of our global resources to our thousands of new Australian and New Zealand domain name reseller customers. The timing of this deal is propitious as it allows CentralNic to participate fully in the proposed launch of the new .au domain extension."

For further information:

About CentralNic Group plc

CentralNic (AIM: CNIC) is a London-based AIM-listed company which drives the growth of the global digital economy by developing and managing software platforms allowing businesses globally to buy subscriptions to domain names, used for their own websites and email, as well as for protecting their brands online. Its core growth strategy is identifying and acquiring cash-generative businesses in its industry with annuity revenue streams and exposure to growth markets and migrating them onto the CentralNic software and operating platforms.

CentralNic operates globally with customers in almost every country in the world. It earns recurring revenues from the worldwide sales of internet domain names and other services on an annual subscription basis.

For more information please visit: www.centralnicgroup.com