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Tucows Inc. and Hostopia.com, Inc. Sign Definitive Agreement for Hostopia to Purchase Certain Tucows' Shared Hosting Customer Assets |
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May 10, 2008 – (HOSTSEARCH.COM) – Tucows Inc. and Hostopia.com, Inc. recently signed a definitive agreement for Hostopia to purchase certain of Tucows' shared hosting customer assets including approximately 14,000 Domain Direct, NetIdentity and ItsYourDomain.com customer accounts.
Hostopia will pay US$1.6 million in cash for these assets, with adjustments made on closing. This amount is payable 20% on signing of the agreement and 80% upon the closing of the transaction, which is scheduled to occur on May 15, 2008. The companies plan to migrate these accounts to Hostopia's unified web service platform by July 2008.
"I am confident these shared hosting customers will enjoy quality service and support with Hostopia directly," said Elliot Noss, President and CEO, Tucows. "This move is the first part of a strategy to reposition our retail business to help individuals and small businesses build their identities online."
"We are very pleased to have concluded this transaction. We are already hosting some of the Tucows Retail Service Group's users so the impact on customers should be minimal," said Colin Campbell, CEO, Hostopia. "Our plan is to provide customers with numerous upgrades and additional value-added services to earn their loyalty and continued business. Traditional web hosting is fast evolving to the SaaS (software as a service) model and Hostopia is perfectly positioned to offer these services to these customers."
The companies indicated that accounts involved in the transaction will continue to be served under the familiar Domain Direct brand, which will operate as a managed service by Hostopia.
Tucows provides Internet services for web hosting companies and ISPs. Through its global network of over 9,000 service providers it provides millions of email boxes and manages over eight million domains. Tucows is an accredited registrar with ICANN (the Internet Corporation for Assigned Names and Numbers). Tucows holds a domain name portfolio of approximately 150,000 domain names that are available for sale, monetized through advertising and support our wholesale Personal Names Service. Our Retail division sells Tucows services to consumers and small business owners through Domain Direct, ItsYourDomain.com and NetIdentity. Tucows.com remains one of the most popular software download sites on the Internet.
Tucows Inc. recently reported its financial results for the first quarter of 2008. "The results of the quarter were right in line with expectations. We are seeing the positive impact of the domain price reduction with an 18% year/year improvement in renewals among other positives. We expect traditional domain name registration to contribute favorably to gross margin in the remainder of the year. In addition, the migration of our email customers to our enhanced platform is nearing completion and we expect to realize considerable cost savings during the second half of the year," explained Elliot Noss, President and CEO of Tucows. |
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