National Internet provider Verio Inc. today announced it purchased domain name registrar and Web hosting provider TABNet in a move aimed at securing a new market channel to target small- and medium-sized businesses.
Terms of the acquisition call for Verio to initially pay $45.5 million in
cash to TABNet shareholders. Verio will make additional contingent payments
up to a total of $43.2 million should TABNet’s recurring revenue and EBITDA
grow at agreed-to amounts through December 1998.
Verio said the acquisition brings with it improved direct marketing reach due to TABNet’s preferential online advertising agreements with Internet powerhouses Netscape, Yahoo!, AltaVista, HotBot and others. TABNet also has co-branding and revenue-sharing agreements with Excite, Infoseek and WhoWhere?
Verio, which currently hosts around 55,000 domain names, also acquires TABNet’s Web hosting business which manages over 125,000 .com, .org and .net domain names. TABNet’s hosting operations will be integrated with Verio’s to expand the company’s national network and operations infrastructure, and enhance its virtual server technology.
The TABNet buy also expands Verio’s 2,200 reseller base by an additional 300 resellers.
“TABNet registers a new name onto the Internet every five minutes, bringing
hundreds of businesses on the Web each day, to whom Verio can market
additional Internet services with our unique brand of national strength and
local, personalized service,” said Verio Chief Executive Officer Justin L.
Jaschke. “This is a strategic acquisition for Verio that substantially
increases our marketing power for reaching small and medium-sized business
customers while further expanding our enhanced services offerings.”
Today’s purchase is the latest in an acquisition and consolidation strategy under which Verio aims to become the leading national Internet service provider for small- and medium-sized businesses.
In early April, Verio teamed up with Qwest Communications International Inc. in a $100 million deal that gave Verio access to Qwest’s Macro Capacity Fiber Network.
Founded in 1995, TABNet presently hosts more than 70,000 domain names, of
which 20,000 are Web sites. It also provides Web site hosting, design, promotion and electronic commerce services.