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InternetNZ announces successful bidder for Domainz

InternetNZ announces successful bidder for Domainz

Following ratification by the InternetNZ Council, President Keith Davidson announced the sale of Domainz for NZ$2 million (subject to normal settlement date adjustments) to Melbourne IT, an Australian domain name registrar, listed on the Australian Stock Exchange (ASX: MLB).

InternetNZ appointed Tim Russell of Deloitte Corporate Finance to manage the sale process, working with a Taskforce from InternetNZ and Domainz. Twelve bids were received from a wide range of organisations. The bids varied in form, but the top four bids were in a close enough cluster to make the final selection a complex process. Price was not the only factor considered, as the successful bidder will be a significant operator in the .nz domain name space. “We considered issues such as impact on staff, ability to add value to the .nz market, future stability, amongst others”, said Davidson.

InternetNZ and Melbourne IT today signed the sale agreement with a settlement date of Friday 5 September 2003.

Domainz is wholly owned by InternetNZ and was formed in April 1997 to manage the .nz registry on behalf of InternetNZ. In June 2000 InternetNZ resolved to create an open market for domain names in NZ, formed .nz Registry Services to deliver the wholesale provision of domain names, and created the Office of the Domain Name Commissioner to oversee the market. At that time Domainz became the Stabilising Registrar under an agreement expiring in September 2003.

A competitive market has now been successfully established, with more than 30 domain name registrars supplying .nz names. InternetNZ hopes that Domainz, under the ownership of Melbourne IT, will remain a strong competitor in the .nz market.

Background papers on the sale, including an FAQ and a timeline, are available on the InternetNZ website at http://www.internetnz.net.nz/sale.

Keith Davidson concludes, “With the sale of Domainz, InternetNZ has completed a process which makes the .nz name space a global leader in its successful implementation of a competitive shared registration system”.

Melbourne IT announced today that it has entered into an agreement to acquire the leading New Zealand based domain name registrar, Domainz, for approximately A$1.8m. As Domainz has surplus cash reserves in excess of A$500,000, the net cash effect on Melbourne IT will be lower than the agreed acquisition price. The acquisition will be financed from surplus operating cash generated in the first half of 2003. Settlement is due to take place in early September.

"Domainz was previously owned by Internet NZ. We see this business as an ideal fit with ours," said Melbourne IT's Chief Executive Officer, Mr Theo Hnarakis.

"It is the market leader in domain names in New Zealand with more than 40,000 names under management and generates approximately A$3.0 million per annum in sales.

"The Domainz acquisition meets all our strict criteria - positive cash flow in the first year following acquisition, ability to contribute immediately to earnings, highly valued brand, experienced and talented staff, strong market position and good synergies with our existing business," he said. "Domainz is a trusted name in the New Zealand market and we already have a number of plans in mind as to how best to build on the business and the brand."

The Chief Executive of Melbourne IT, Mr Theo Hnarakis said he was delighted that his company’s bid had been successful. Furthermore, we have a commitment to maintain operations in New Zealand and continue to offer world class customer care to New Zealand domain name owners.

“There are strong synergies between our companies which we believe will be of benefit to both businesses.

Melbourne IT has a proven track record of dealing with businesses large and small, and offers a range of entry level internet products and services that should be attractive to the New Zealand market.

“We are delighted to have the opportunity to participate in the growth of the internet in New Zealand and work with progressive organizations such as Internet NZ” said Mr Hnarakis.

ENDS

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