RIGHTSIDE GROUP, LTD. (NASDAQ:NAME) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01Entry into a Material Definitive Agreement.
Stock Purchase Agreement
On January 20, 2017, Rightside Group, Ltd. (Rightside or the
Company) and its wholly owned subsidiaries, Rightside Operating
Co. (Seller) and eNom, Incorporated (eNom) entered into a Stock
Purchase Agreement (the Purchase Agreement) with Tucows Inc.
(Tucows) and Tucows (Emerald), LLC, a wholly-owned subsidiary of
Tucows Inc. (the Purchaser), to which the Purchaser will purchase
Rightsides eNom business through the purchase of all of the
outstanding stock of eNom from Seller in exchange for $83.5
million, less a net working capital adjustment of $6.8 million,
resulting in net cash at closing of $76.7 million (the
Transaction). The purchase price is subject to customary
adjustments following the closing, including a working capital
adjustment to the extent such amount is greater or less than the
estimated net working capital amount determined at closing. At
the closing, the Company will pay transaction expenses of
approximately $4.0 million and substantially all of its existing
indebtedness. The transaction is expected to close on January 20,
2017.
The foregoing description of the Purchase Agreement and the
transactions contemplated thereby does not purport to be
complete, and is subject to, and qualified in its entirety by
reference to, the full text of the Purchase Agreement, which will
be filed as an exhibit to the Companys Current Report on Form 8-K
upon the closing of the Transaction.
The Purchase Agreement contains customary representations and
warranties, covenants and agreements, and Rightside has agreed to
indemnify the Purchaser with respect to certain indemnity claims.
These representations and warranties were made solely for the
benefit of the parties to the Purchase Agreement and:
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should not be treated as categorical statements of fact, |
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may have been qualified in the Purchase Agreement by |
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may apply contractual standards of materiality that are |
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were made only as of the date of the Purchase Agreement |
The Companys stockholders are not third party beneficiaries under
the Purchase Agreement and should not rely on the
representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
conditions of the Company.
On January 20, 2017, the Company issued a press release
announcing the entry into the Purchase Agreement. A copy of the
press release is attached hereto as Exhibit 99.1 and, to the
extent relating to the announcement of the entry into the
Purchase Agreement, is incorporated herein by reference. The
press release should be read in conjunction with the note
regarding forward-looking statements, which is included in the
text of the press release.
Amendment to Credit Agreement
On January 20, 2017, the Company entered into a Limited Consent
and Amendment No. 4 to Credit Agreement (the Amendment) by and
among the Company, its domestic subsidiaries Rightside Operating
Co. and eNom (together with the Company, the U.S. Borrowers), its
foreign subsidiaries DMIH Limited, United TLD Holdco Ltd. and
Rightside Domains Europe Limited (collectively the Non-U.S.
Borrowers and together with the U.S. Borrowers, the Borrowers),
Hot Media, Inc. and Acquire this Name, Inc., as guarantors, and
Silicon Valley Bank (SVB), as lender and collateral agent. The
Amendment revises the terms of the Companys existing Credit
Agreement, dated as of August 1, 2014, as amended (the SVB Credit
Facility), by and among the Borrowers and SVB, which provided a
$30.0 million revolving loan facility with a $15.0 million
subfacility for the issuance of letters of credit.
The Amendment, among other changes, releases eNom as a party to
the SVB Credit Facility and the assets sold in the Transaction
from the collateral securing the obligations under the SVB Credit
Facility; suspends the availability period for revolving loans,
requires the Company to repay the outstanding revolving loans in
full and reinstates the availability period once the Company
satisfies certain conditions, including further amendments to the
SVB Credit Facility and delivery of projections giving effect to
the Transaction; lowers the total commitment from $30.0 million
to $15.0 million; suspends the application of the financial
covenants until the availability period for revolving loans is
reinstated; and amends the financial covenants that will have
effect once the
availability period for the revolving loans is reinstated,
including the maximum consolidated net leverage ratio, minimum
liquidity ratio and minimum consolidated EBITDA. The Amendment
further consents to the Transaction.
Additional details of the SVB Credit Facility were previously
disclosed in the Companys Forms 8-K filed with the Securities and
Exchange Commission on August 7, 2014, August 15, 2014, June 26,
2015, and April 4, 2016 and are incorporated herein by reference.
The foregoing description of the Amendment is qualified in its
entirety by reference to the full text of the Amendment, a copy
of which is filed as Exhibit 10.1 hereto and incorporated herein
by reference.
Item 9.01Financial Statements and Exhibits.
(d)Exhibits
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Exhibit Number |
Description |
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10.1 |
Amendment No. 4 of Credit Agreement between Rightside |
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99.1 |
Press release dated January 20, 2017. |
About RIGHTSIDE GROUP, LTD. (NASDAQ:NAME)
Rightside Group, Ltd. is a provider of domain name services that enable businesses and consumers to find, establish and maintain their digital address. The Company is a registrar, offering domain name registration and other related services to resellers and domain name registrants. It provides infrastructure services through its eNom brand. It has over 16.5 million domain names under management. It has a portfolio of over 40 generic Top Level Domains (gTLDs) acquired through Internet Corporation for Assigned Names and Numbers (ICANN)’s expansion of new gTLDs. It has launched all of its gTLDs, including .NEWS, .LIVE, and .FAMILY, into general availability in the marketplace. Its registry services business builds a distribution network of over 125 ICANN accredited registrars, including GoDaddy, eNom and Name.com, as well as other complementary distribution partners, such as Website builders and e-mail service providers, that offer its gTLD domain names to businesses and consumers. RIGHTSIDE GROUP, LTD. (NASDAQ:NAME) Recent Trading Information
RIGHTSIDE GROUP, LTD. (NASDAQ:NAME) closed its last trading session 00.00 at 8.14 with 8,184 shares trading hands.