Virtual Internet is to be acquired by US rival Register.com in a £12 million deal. London-based Virtual revealed it was in takeover talks in December, but the discussions ground to a halt last week. However, Virtual and New York-based Register.com – which specializes in domain names – later resumed talks.
Register.com, Inc. has announced a recommended cash offer by a wholly-owned Register.com subsidiary for Virtual Internet. The offer values Virtual Internet at approximately £11.99 million.
The Directors of Virtual Internet unanimously recommended shareholders to accept the offer and have irrevocably undertaken to do so in respect of their own holdings, representing approximately 53.2 per cent of Virtual Internet’s existing issued shares.
Virtual Internet also announced its preliminary results for the year ended 31 October 2001. In the year then ended, Virtual Internet’s turnover and gross profit amounted to £9.3 million (2000: £6.3 million) and £6.5 million (2000: £4.4 million) respectively. The loss before taxation, goodwill amortisation, exceptional items and the employee share incentive charges amounted to £7.2 million (2000: £4.3 million). The effect of exceptional items was to increase the reported loss before taxation to £19.7 million (2000: £8.0 million). Cash balances at 31 October 2001 were approximately £8.6 million (2000: £19.5 million). Cash balances at 31 December 2001 were approximately £7.4 million.
Richard Forman, Chairman, President and CEO of Register.com said This Offer, if consummated, would foster Register.com’s growth in the U.K. and Europe, particularly in the corporate domain name services market. The combined expertise and knowledge of Register.com and Virtual Internet will allow us to develop new products and services for our customers, targeted to their needs.
William Slee, Chairman of Virtual Internet said The announcement today of the recommended offer for Virtual Internet represents a significant development for the Company. Having achieved much in the last few years, particularly with regard to our Net Searchers business, the Board considers that the Company will be better able to execute its strategy as part of the Register.com Group, which has greater resources and presence in complementary international markets. The Board unanimously recommends the Offer to all shareholders and looks forward to working closely with Register.com into the future.