Rightside Group, Ltd. (NASDAQ:NAME) and Donuts Inc., a leading domain name registry for new domain extensions, today announced that the two companies have entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Donuts will acquire Rightside for $10.60 per share in an all-cash tender offer, for an aggregate purchase price of approximately $213MM. The purchase price represents a premium of approximately 12% percent over Rightside's average closing price for the 30-day trading period ended June 13, 2017 and a premium of approximately 22% percent over Rightside's average enterprise value (excluding cash) for such period.
The Merger Agreement was unanimously approved by Rightside's Board of Directors following a comprehensive review of strategic and financial alternatives that Rightside announced in the first quarter of 2017.
"We believe that this agreement offers a substantial cash premium to our shareholders," said Taryn Naidu, Rightside chief executive officer. "We look forward to working closely with Donuts to consummate this merger."
"Donuts and Rightside have a long history of working together, and we are delighted to take the next step with this transaction," said Bruce Jaffe, Donuts chief executive officer. "We believe that the combined company will be well positioned to serve our registrar customers and the millions of businesses and individuals who are embracing new ways to brand their online identities."
Pursuant to the terms of the Merger Agreement, the transaction will be completed through an all-cash tender offer, and closing is contingent upon tender of more than 50 percent of outstanding Rightside common shares, the receipt of certain regulatory approvals and other customary closing conditions.
The transaction does not have a financing condition and is currently expected to close during the third quarter of 2017. Following the transaction, Rightside will become a wholly-owned subsidiary of Donuts, a privately-held company, and Rightside's common shares will no longer be listed on any public market.
Barclays Capital Inc. is serving as financial advisor to Rightside. Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as Rightside's legal advisor. Silicon Valley Bank is providing a credit facility to Donuts as part of this transaction. Perkins Coie LLP is acting as Donuts' legal advisor.
Rightside inspires and delivers new possibilities for consumers and businesses to define and present themselves online. The company, with its affiliates, is a leading provider of domain name services, offering one of the industry's most comprehensive platforms for the discovery, registration, usage and monetization of domain names. In addition to being a new gTLD registry operator, Rightside is home to one of the most admired registrar brands in the industry, Name.com. Headquartered in Kirkland, WA, Rightside has offices in North America and Europe. For more information please visit www.Rightside.co.
Donuts is a leading domain name registry for new top-level Internet domain extensions. Donuts offers businesses, individuals and organizations new ways to brand and unify their online identities, in multiple languages and character sets. Donuts is headquartered in Bellevue, Washington. For more information, please visit www.donuts.domains.
Rightside Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements concerning the expected tender offer, merger, and timing of closing, and statements containing words such as may, believe, anticipate, expect, intend, plan, project, and estimate or similar expressions constitute forward-looking statements. Forward-looking statements involve risks and uncertainties including, among others: the failure to satisfy regulatory and other closing conditions to the tender offer, including the tender of a sufficient number of Rightside common shares in the offering. More information about potential risk factors that could affect Rightside's operating and financial results are contained in Rightside's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed with the Securities and Exchange Commission (the "SEC"). All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Rightside does not intend to revise or update the information set forth in this press release, except as required by law, and may not provide this type of information in the future.