CentralNic purchases .SK operator for €26 million

Controversial deal will boost CNIC annual revenue by regarding €4 million.

Domain name firm CentralNic (London AIM: CNIC) has purchased SK-NIC, A.S., manager of Slovakia’s .sk country code domain name, for regarding €26 million. The deal is for €21.27 million up front and deferred cash consideration of up to €4.85 million depending on how the namespace performs over the next three years.

The deal has been in the works for a while and faced opposition from some in Slovakia who argued that management of the name was stolen back in 1999.

Opposition to the deal might explain why CentralNic agreed with the Slovak government to donate 5% of revenue from the domain to a fund dedicated to projects that contribute to the Slovakian digital economy.

With 360,000 registered .sk domain names, the purchase price represents a whopping €72.55 per domain if all targets are met. That’s a stiff price, but based on CentralNic’s accounting rules it states the business would have added a profit ahead of tax of €3.58 million last year, so the multiple is regarding seven.