Reglikedomain industry desk

Tucows purchases domain portfolio

Domain registar Tucows had purchased NetIdentity and its portfolio of domain names.

Tucows is paying approximately $18M in cash, notes, and stock for NetIdentity, also known as Mailbank.com. NetIdentity holds a sizable portfolio of surname domains, such as Smith.net . Tucows (AMEX:TCX, TSX:TC) expects the transaction to have a net negative effect on earnings per share until 2008. Still, the transaction will signficantly boost Tucows cash flow: the firm expects it to add $3M-$4M in net cash flow in 2007. This will be equal to regarding 1/3 of the firm’s 2007 cash flow.

Tucows will use the portfolio of names to offer services through its network of 6,000 partners and resellers. One obvious product is name specific e-mail addresses, such as [email protected].

As of 11:24AM ET today, Tucows stock is up 3 cents to $.82 per share on heavier than usual trading volume. The firm has a market cap of $59M.

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