Dreamscape Networks nets Singapore hosting provider for $29M
- 22 June, 2017 10:48
Dreamscape Networks (ASX:DN8), the company behind domain registry, Crazy Domains, has acquired a Singapore-based hosting and domain services company, the Vodien Group, for $29.67 million.
As per the agreement, the online solutions provider of domain names, hosting, and solutions will take over Vodien Internet Solutions and all related companies and businesses, namely Singhost, IT Works Internet, Webvisions, and sgDomain.
According to Dreamscape Networks, the company was attracted to the Vodien Group for its presence in South East Asia (SEA), being one of the top hosting and .sg domain provider in Singapore and having emerging operations in Malaysia and Indonesia.
In a statement on the Australian Securities Exchange (ASX), Dreamscape Networks said the acquisition will be wholly internally funded through the combination of 42.5 million new DN8 shares issued to the founders of the Vodien Group at a deemed issue price of $0.25 per share and $19 million in cash.
Dreamscape Networks managing director and CEO, Mark Evans, said the acquisition, expected to be complete by the end of July, will enable the company to expand its reach across SEA, in addition to a large customer base, greater margins, and Vodien Group’s staff.
“This is a strategically important acquisition for Dreamscape Networks. The leadership team at Vodien Group has substantial knowledge of the local industry, with a strong track record of growth, and will be a great addition to our senior executive team,” he said.
He also mentioned that the acquisition is a “great opportunity” to introduce existing customers on both ends to additional add-on value products and services.
“By acquiring this Asian hosting brand, we can leverage its market position and customer awareness to immediately increase our footprint in the South-East Asia region, without the need to establish our own Singapore hub infrastructure.”
Vodien Group CEO, Alvin Poh, said both organisations have a “strong culture and business fit” and share a common desire to become a leading internet domain and hosting business in Asia.
In addition, as part of the purchase plan, the Vodien Group founders, John Lee and Poh, will join DN8 as senior executives.
“I am looking forward to becoming part of the senior executive team of Dreamscape Networks and working with the team to deliver on the growth opportunities that we see,” Poh said.
The company also re-affirmed its guidance for FY 2017, as set out in its prospectus dated 3 November 2016. The company said its forecast earnings are “in line with management’s expectations”.
Specifically, Dreamscape Networks outlined that the purchase would add $9.8 million of bookings and $3.5 million of EBITDA to DN8’s pro-forma annualised 2017 figures, representing more than 30 per cent of its FY17 prospectus forecast EBITDA.
The acquisition is subject to customary conditions, including the finalisation of a share sale and purchase agreement.
At the time of writing, Dreamscape Networks’ shares were trading at $0.20.