In what has to be one of the largest domain portfolio acquisitions ever, Marchex Inc and Name Development LTD (rumoured to be Ultimate Search in virtual disguise) have just firmly placed themselves in domain sales history books:
"SEATTLE, WA - November 23, 2004 - Marchex, Inc. (NASDAQ: MCHX), a provider of technology-based merchant services that facilitate and drive growth in online transactions, today announced that it has signed a definitive agreement to acquire certain assets of Name Development Ltd., a corporation operating in the direct navigation market, for $164.2 million, including $155.2 million in cash and $9 million in stock (valued based on the 10-day trailing average measured from closing date). The transaction is expected to close during the first quarter of 2005. Details of a planned financing event to provide the cash consideration for the transaction will be announced separately within the next 30 days.
As part of this transaction, Marchex will be acquiring a large base of online user traffic, which Marchex estimates at more than 17 million unique visitors per month in October 2004. This traffic is generated from a portfolio of Web properties, or Internet domains, which are generally reflective of commercially-relevant search terms in many of the Internet's most popular vertical commerce categories, and may include geographically-targeted elements. The total number of Internet domains in the portfolio, including Marchex's existing Internet domains, is more than 100,000. "
source : Marchex.com
Seattlepi.com has some interesting insight into the deal from financial analyst Alan Davis:
"The $164 million deal is unusual given that it involves a relatively unknown offshore entity, said Alan Davis, an analyst at McAdams Wright Ragen.
"They are being pretty private about it, that is interesting," said Davis. "It is not a traditional business, but it is certainly a growing and cash-flow-positive organization."
Name Development is projected to have more than $19 million in revenues this year, with operating margins expected to top 80 percent. It generates about twice as much cash flow as Marchex, said Davis.
"It is minimal employees and a bunch of domain names, and they are driving revenues off of that," said Davis. "It is highly profitable."