registrars Brisio Innovations to Acquire NameSilo

Arca · Mar 9, 2018

Brisio Innovations to Acquire NameSilo, LLC, Plans to List as a Separate Public Company

Brisio Innovations Inc. (CSE: BZI) (OTC Pink: NTCEF) (the "Company") is pleased to announce that it has signed a definitive share purchase agreement (the "Definitive Agreement") with NameSilo, LLC ("NameSilo") whereby the Company has agreed to acquire all of the issued and outstanding securities of NameSilo (the "Transaction").

With a priority of no interruption to existing customers or NameSilo's growth trajectory, the Transaction will not impact the existing operations of NameSilo and the founders, who are also the owner/operators of NameSilo and who will continue in their current roles and continue operating the business. Further, there are no planned changes to the system infrastructure or operational policies of the business.

NameSilo is a low-cost provider of domain name registration and management services, and is an ICANN-accredited registrar. NameSilo is a high growth registrar with nearly 1.5 million domains under management, and over 85,000 customers from approximately 160 countries. According to RegistrarOwl.com, which provides domain registrar industry statistics from ICANN, NameSilo is the 6th-fastest growing registrar in the world based on percentage growth of new registrations, and 6th-fastest growing registrar in the world when based on net new registrations, behind household names such as Google, GoDaddy and Alibaba.

"We are excited to enter this new phase of the NameSilo journey," said Michael Goldfarb, founder and Managing Member of NameSilo. "We couldn't be happier to find a partner with a track record of success like Brisio, and we look forward to working with them to build upon the success of NameSilo. Our customers and partners will continue to receive the same excellent service they are accustomed to and they will enjoy the benefits of access to additional resources that will be made available."

NameSilo recorded approximately US$11.1 million in annual recurring billings in 2017 up from US$6.9 million in 2016. It has grown its domain names under management from approximately 745,000 domains at the beginning of 2017 to over 1.35 million today, a growth rate of over 65% versus industry averages of approximately 7%. Additionally, NameSilo maintains a customer retention rate of approximately 87%.

Under the terms of the Definitive Agreement, the Company will acquire all of the securities of NameSilo and, in consideration of which, the Company will pay a total of US$9,511,500 (the "Purchase Price") to the members of NameSilo (the "NameSilo Members"). The closing of the Transaction is anticipated to be July 2, 2018.

Further, NameSilo Members will be entitled to certain earnout payments provided that the business achieves a specified EBITDA. All earnout payments will be made no later than August 15, 2018 and will be payable in cash and shares.

After completion of the Transaction, the Company intends to spin-out NameSilo as a separately listed entity on a Canadian stock exchange. The board of directors of the Company will provide further details on the proposed spin-out on closing of the Transaction.

CEO Paul Andreola states, "We are extremely pleased to have found a world class company that meets our criteria of high growth, profitability, high customer retention and customer satisfaction. We look forward to working with the NameSilo team to continue to build the brand and provide their customers outstanding value and service and to meet their ongoing needs."

The Transaction is subject to customary conditions contained in the Definitive Agreement as well as approval of the stock exchange, and the Company completing sufficient financing to satisfy the Purchase Price. If the Company is unable to close the transaction, the Company will be required to pay a break fee to NameSilo.

Brisio Innovations Inc.
Paul Andreola
President, CEO and Director
(604) 644-0072
www.brisio.com

About Brisio Innovations

Brisio Innovations Inc. invests its capital in companies and opportunities which management believes are undervalued and have potential for significant appreciation. The company makes investments in both public and private markets and focuses on opportunities in a wide variety of industries excluding the resource and resource service sectors. Brisio does not invest on behalf of any third party and it does not offer investment advice.

Disclaimer for Forward-Looking Information Certain statements in this news release are forward-looking statements, which reflect the expectations of management regarding potential future investments by the Company. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause the Company's actual results to differ materially from those expressed or implied by the forward looking statements.

Source.

wwwweb · Mar 9, 2018

tonyk2000 said:
As a side note, NameSilo had become well-known and respected player in the market so fast that some competitors might start worrying. Some competitors might want to try to shut them down in one way or another, or at least to takeover them. Yes we never know what happens "behind the scenes"... why Canadians "Brisio"? These new owners are not known in domaining market, so one would reasonably guess that they may not necessary have enough understanding of domaining. They may be pros in stock market etc., but domaining is very different. Such companies often do "quick flips", technically similar to what domainers do right here, in appropriate sections of this forum. What if we see some press release someday disclosing the resale of NameSilo to "...." <competitors name here>

You nailed it, they look for what they deem undervalued companies where they see growth, to unlock value. Buy low, sell high is how you do this. If they want to grow via equity, they need to spend a lot more money. When godaddy saw they were flat lining on discount domain registrations, what did they do, restrict coupons, raise prices, look for new sales channels, and built the world's most valuable domain portfolio, which probably cost quarter of a billion dollars to execute.

I understand during these types of busy new ownership, gives old ownership/management assurances we aren't going to change anything, this is your baby, keep doing what your doing. Right now capital is flowing, as soon as we see interest rates push higher, trade wars develop, stock market wealth start to errode, that is where things get tricky, and capital gets tighter. It's true Namesilo needs money to grow, but usually you see ownership open up a round, not sell the whole company. Once you do that you have no skin in the game, and you lose focus at times.

Not saying this is how it plays out, like I said I have enjoyed the services this company offers to this point, and I am sure many here have liked the alt choice they have, but as Tony said, we have just seen this go sideways so many times before. I mean Godaddy is a monster, and continue to grow, Namesilo needs money to do that. I would say if they can build a marketplace, with some kind of sales channel, or help owners unlock the value of their domains in the open market is the fastest way to do that. There is no margin in domain registrations.

namesilo · Mar 9, 2018

carob said:
The formula is cut costs, take on debt, sell fast. I hope that is not happening. I'm not rushing out the door, but I'm not moving anything more in till I get a sense of where this is going.

Thank you @namesilo for the replies. If I have this right, you wanted further investment to expand. Just wonder what other avenues there might be for that? Truth is I had taken the registrar for granted and not asked who invested in it or what their goals are. But I did wonder if the low prices and high level of service in a low margin industry were there to pull in new customers who might find things changed later, whatever the good intentions of the founders.

Namesilo provide a great service - that is why you are getting so many messages of concern here.

Yeah, we totally understand

The intentions of this acquisition is to raise money to expand the business - nothing more, nothing less. Our belief, and the belief of Brisio, is that the way to grow a successful and expanding business such as NameSilo is to continue doing what it's done, but do so on a larger scale. Investment, such as taking the company public, is one such way to raise money to reinvest in the business.

We've been asked why there are not more challengers to industry heavyweights and the answer in many cases is lack of resources. We hope to continue expanding upon what we've built and to do so faster and to gain even more market share. A major focus of our business has been and will continue to be on our Marketplace for example. The more eyeballs we get, the more we can increase sales which is good for both our customers and ourselves. We think the industry is ripe for further growth with a trusted brand such as ours, and neither we or Brisio have any interest in messing with that formula... just accelerating it.

namesilo · Mar 9, 2018

Embrand said:
First of all congratulations to the founders of @namesilo!

I understand some of the concerns raised. But I also think we should give them the benefit of the doubt. Surely, the new owners know that NameSilo are totally dependent on making domainers happy.

They therefore also know that if domainers are not happy, they are capable of moving thousands and thousands of domains away instantly as they are not dependent on other products such as hosting.

I'm actually more surprised that a competing registrar didn't grab this opportunity to gain an immensly popular registrar before Brisio did...

Thanks - that's what we're asking... we hope that we've earned people's trust thus far, and we would certainly appreciate the opportunity to continue doing so. It is counter-productive and financially stupid (sorry, couldn't think of a better word!) to take a successful business and change it. We believe it is much better to take what has worked and expand on it - as we have always tried to do.

We know we will be under increased scrutiny in the coming days, weeks, months and years, and we welcome this as it is a motivating factor to ensure we continue to earn trust.

carob · Mar 9, 2018

namesilo said:
A major focus of our business has been and will continue to be on our Marketplace for example.

That really has potential, the competitors all seem to have limitations that they can't or won't deal with.

tonyk2000 · Mar 9, 2018

carob said:
Namesilo provide a great service - that is why you are getting so many messages of concern here

My thoughts exactly. I also hope that all current NameSilo employees WILL still have their jobs @ Name Silo, as it is the most important part of any company. The people. The team.

wwwweb · Mar 9, 2018

namesilo said:
Yeah, we totally understand

The intentions of this acquisition is to raise money to expand the business - nothing more, nothing less. Our belief, and the belief of Brisio, is that the way to grow a successful and expanding business such as NameSilo is to continue doing what it's done, but do so on a larger scale. Investment, such as taking the company public, is one such way to raise money to reinvest in the business.

We've been asked why there are not more challengers to industry heavyweights and the answer in many cases is lack of resources. We hope to continue expanding upon what we've built and to do so faster and to gain even more market share. A major focus of our business has been and will continue to be on our Marketplace for example. The more eyeballs we get, the more we can increase sales which is good for both our customers and ourselves. We think the industry is ripe for further growth with a trusted brand such as ours, and neither we or Brisio have any interest in messing with that formula... just accelerating it.

Here is my thing when you raise money, you offer up shares, or a percentage, you guys sold the entire company?

namesilo · Mar 9, 2018

wwwweb said:
You nailed it, they look for what they deem undervalued companies where they see growth, to unlock value. Buy low, sell high is how you do this. If they want to grow via equity, they need to spend a lot more money. When godaddy saw they were flat lining on discount domain registrations, what did they do, restrict coupons, raise prices, look for new sales channels, and built the world's most valuable domain portfolio, which probably cost quarter of a billion dollars to execute.

I understand during these types of busy new ownership, gives old ownership/management assurances we aren't going to change anything, this is your baby, keep doing what your doing. Right now capital is flowing, as soon as we see interest rates push higher, trade wars develop, stock market wealth start to errode, that is where things get tricky, and capital gets tighter. It's true Namesilo needs money to grow, but usually you see ownership open up a round, not sell the whole company. Once you do that you have no skin in the game, and you lose focus at times.

Not saying this is how it plays out, like I said I have enjoyed the services this company offers to this point, and I am sure many here have liked the alt choice they have, but as Tony said, we have just seen this go sideways so many times before. I mean Godaddy is a monster, and continue to grow, Namesilo needs money to do that. I would say if they can build a marketplace, with some kind of sales channel, or help owners unlock the value of their domains in the open market is the fastest way to do that. There is no margin in domain registrations.

Thanks - you make many very good points. Guess the best we can say is to watch us closely and see how things turn out. We of course cannot give a 100% guarantee on how everything works out, but we can tell you that the intentions are very good on all sides, and raising money to expand the business can have a lot of positive impacts. Yes, we've seen this go sideways many times as well, and if this happens with us, we expect the ramifications. We have a lot of loyal customers who are active on NamePros and other places, and we know that keeping the community of domain investors happy is a top priority. If we don't... then we know word will spread and we will suffer the consequences. Best I can offer is to keep a close eye as we know everyone will.

namesilo · Mar 9, 2018

tonyk2000 said:
My thoughts exactly. I also hope that all current NameSilo employees WILL still have their jobs @ Name Silo, as it is the most important part of any company. The people. The team.

Yep - everyone here is still here and will remain as such. Might see some new names replying in support in the coming months, especially in international markets. Other than that, the same people who have been here are remaining. Appreciate the sentiment

wwwweb · Mar 9, 2018

namesilo said:
Thanks - you make many very good points. Guess the best we can say is to watch us closely and see how things turn out. We of course cannot give a 100% guarantee on how everything works out, but we can tell you that the intentions are very good on all sides, and raising money to expand the business can have a lot of positive impacts. Yes, we've seen this go sideways many times as well, and if this happens with us, we expect the ramifications. We have a lot of loyal customers who are active on NamePros and other places, and we know that keeping the community of domain investors happy is a top priority. If we don't... then we know word will spread and we will suffer the consequences. Best I can offer is to keep a close eye as we know everyone will.

Actually you are smart to sell the entire company at this point, as valuations have never been higher when it comes to tech, and capital markets. We probably have more downside risk, than upside in the overall markets going forward. Frustrating for new buyers, more so an uptick for the sellers, many times in such sub $10M sales, we see the old owners buy the company back for less, when new owners get stuck in a bad market, or find new opportunities, and are locked out from raising more capital for it.

We will see how it plays out.

namesilo · Mar 9, 2018

wwwweb said:
Here is my thing when you raise money, you offer up shares, or a percentage, you guys sold the entire company?

We can't really get into the specifics of the deal structure beyond what has been publicly released, but we can say that our founders are well-incentivized to ensure maintaining smooth operations and to continue growing the business. Not trying to be unnecessarily cryptic and more details of the acquisition will come out as disclosure is required and allowed.

namesilo · Mar 9, 2018

wwwweb said:
Actually you are smart to sell the entire company at this point, as valuations have never been higher when it comes to tech, and capital markets. We probably have more downside risk, than upside in the overall markets going forward. Frustrating for new buyers, more so an uptick for the sellers, many times in such sub $10M sales, we see the old owners buy the company back for less, when new owners get stuck in a bad market, or find new opportunities, and are locked out from raising more capital for it.

We will see how it plays out.

Yeah, we're very excited about the future. I know that sounds like typical hyperbole and a canned response, but it genuinely is the case. We've seen posts on NamePros and other places, as well as being asked directly many times, why there are not more competitors to the Godaddy (and to a lesser-extend other registrars) market domination in our industry. We have been very proud of our growth considering we've spent nearly nothing on marketing since we started about 8 years ago. It is a hard market to penetrate and a lot of doing so is built on trust. We feel as though we've earned that trust and have grown quickly as a result.

Now, with increased investment, we feel we will be able to continue our expansion faster and by continuing with the same business model and philosophies that got us here. Investors are typically motivated to make changes based on financial issues rather than sound business decisions with long-term thinking and a true understanding of customers in mind. This is of course counter-productive and the reason behind failed acquisitions in our industry (and others), and a mistake we are acutely aware of and dedicated to not repeating. Also, our model has been and remains increasingly profitable. The model scales quite well so there should be no motivation for financial-types "meddling"

offthehandle · Mar 9, 2018

namesilo said:
We have been very proud of our growth considering we've spent nearly nothing on marketing since we started about 8 years ago.

That is excellent, that means satisfied customer referrals, and much respect to you as founders, as that was how I became a customer.

Congratulations on selling a company you built from scratch, it must be nice to know you have succeeded and receiving a buyout. I am however skeptical like others here posting concerns in this thread. In my career I have been involved as an employee in a small 100 person business and witnessed 3 acquisitions by outside capital investors with one public NYSE listed company, and another acquired by a large Fortune 500 company. Both were M&A growth oriented plays. Consolidation and buying up competition. Everything starts off well, promises made by new owners to old owners that no changes will occur, then unfortunately within 6 months cost cutting and bean counters take over. That was modus operanda, then. Both are now history for various reasons, the owners were happy to get their checks. But in the end, nothing remained the same. Being listed publically increases growth pressures especially if additional investment is made. I hope your situation is as described and future growth is managed well and remains transparent to your loyal customer base.

I really sincerely hope the best for this and your growth aspirations are not too high nor pressured externally by your holding company to increase profits (prices), and things remain non eventful and maintain a small, low overhead operation and keep your niche. All the best to your group!

namesilo · Mar 9, 2018

offthehandle said:
That is excellent, that means satisfied customer referrals, and much respect to you as founders, as that was how I became a customer.

Congratulations on selling a company you built from scratch, it must be nice to know you have succeeded and receiving a buyout. I am however skeptical like others here posting concerns in this thread. In my career I have been involved as an employee in a small 100 person business and witnessed 3 acquisitions by outside capital investors with one public NYSE listed company, and another acquired by a large Fortune 500 company. Both were M&A growth oriented plays. Consolidation and buying up competition. Everything starts off well, promises made by new owners to old owners that no changes will occur, then unfortunately within 6 months cost cutting and bean counters take over. That was modus operanda, then. Both are now history for various reasons, the owners were happy to get their checks. But in the end, nothing remained the same. Being listed publically increases growth pressures especially if additional investment is made. I hope your situation is as described and future growth is managed well and remains transparent to your loyal customer base.

I really sincerely hope the best for this and your growth aspirations are not too high nor pressured externally by your holding company to increase profits (prices), and things remain non eventful and maintain a small, low overhead operation and keep your niche. All the best to your group!

Thanks for your well-wishes and feedback - they are very much appreciated!

Yeah, we've been involved on both sides of the equation in previous businesses as well. We've seen good intentions get derailed in the ways you and others have listed here, and it is a shame when that happens. While we of course can't give a 100% guarantee how things will ultimately work out (whether we took this route, stayed the course or went another direction), I can tell you that we feel really good about the future of the business and the entire acquisition process being non eventful. There are no plans to relevantly increase operating costs or change the business in any way which would allow us to continuing controlling costs which is the starting point for the business model. Brisio understands this very well and there are no plans to increase operating costs.

We're excited to let our actions back up our words in the coming days, weeks, months and years, and thanks again for the reply.

Furquan · Mar 9, 2018

@namesilo,

You people are Awesome, don't knew about future but if the new company don't try to change things "you will be no 1 register at the end of year". But if they try to change something then your company will go back to where you get started.

Good luck with new partner.

namesilo · Mar 9, 2018

Furquah said:
@namesilo,

You people are Awesome, don't knew about future but if the new company don't try to change things "you will be no 1 register at the end of year". But if they try to change something then your company will go back to where you get started.

Good luck with new partner.

Thanks, very much appreciated!

xeroox · Mar 9, 2018

Offtopic. Will you provide any new coupon to celebrate the aquisition?

And congrats!

namesilo · Mar 9, 2018

xeroox said:
Offtopic. Will you provide any new coupon to celebrate the aquisition?
And congrats!

Ha! A very good idea

Give us a few days and let us think of something...

xeroox · Mar 9, 2018

namesilo said:
Ha! A very good idea

Give us a few days and let us think of something...

Well we are all your fans. You know where to find us

creataweb · Mar 9, 2018

Congrats - hope it all works out well and you become a juggernaut but stay the same in regards to customers

namesilo · Mar 9, 2018

creataweb said:
Congrats - hope it all works out well and you become a juggernaut but stay the same in regards to customers

Thanks! Yes, that is certainly our goal and something we are very strongly committed to doing.

Kassey Lee · Mar 9, 2018

I have moved most of my domains to NS. Only one last batch to go this month. BECAUSE their service is superb! Super fast and responsive! And prices are very competitive!

Now, the fact is: the boss has changed, and will change again when it is listed. I, for one, will be watching and preparing to move on if thing goes downhill.

namesilo · Mar 9, 2018

Kassey Lee said:
I have moved most of my domains to NS. Only one last batch to go this month. BECAUSE their service is superb! Super fast and responsive! And prices are very competitive!

Now, the fact is: the boss has changed, and will change again when it is listed. I, for one, will be watching and preparing to move on if thing goes downhill.

Thanks - appreciate the kind words! Thanks also for trusting us with your business, and we will not give you a reason to move

SuperBrander · Mar 9, 2018

@namesilo Congrats and good luck. You're a good registrar and I hope this change will mean good things for domainers. If you're planning on positive changes... please make fixing the expired domain auctions a priority.

1. List expired domains at a point where owners can't renew the domains anymore or at least close to that point. Having to sometimes wait 30 days or so to know if a domain is renewed or not when the owner usually renews is maddening. 2. Stop forcing people to pre fund their account, then when the owner renews the expired domain and the sale becomes void, forcing the buyers to wait 60 days from the point of purchase till they can get the money back. I understand that you're afraid from charge backs but this practice isn't done by any other domain registrar and it's basically holding your clients' money hostage for 2 months on top of a failed sale.

Thanks and again- good luck.

offthehandle · Mar 9, 2018

namesilo said:
Thanks for your well-wishes and feedback - they are very much appreciated!

Yeah, we've been involved on both sides of the equation in previous businesses as well. We've seen good intentions get derailed in the ways you and others have listed here, and it is a shame when that happens. While we of course can't give a 100% guarantee how things will ultimately work out (whether we took this route, stayed the course or went another direction), I can tell you that we feel really good about the future of the business and the entire acquisition process being non eventful. There are no plans to relevantly increase operating costs or change the business in any way which would allow us to continuing controlling costs which is the starting point for the business model. Brisio understands this very well and there are no plans to increase operating costs.

We're excited to let our actions back up our words in the coming days, weeks, months and years, and thanks again for the reply.

Thank you for taking the time reply and respond, its admired.

Just the fact you come into this forum and reply is self evident in your customer service and care, it’s really great. I have watched all the threads this past year and always professional and responsive. You need a JD Powers like nomination for customer service!

namesilo · Mar 9, 2018

SuperBrander said:
@namesilo Congrats and good luck. You're a good registrar and I hope this change will mean good things for domainers. If you're planning on positive changes... please make fixing the expired domain auctions a priority.

1. List expired domains at a point where owners can't renew the domains anymore or at least close to that point. Having to sometimes wait 30 days or so to know if a domain is renewed or not when the owner usually renews is maddening. 2. Stop forcing people to pre fund their account, then when the seller renews the expired domain and the sale becomes void, forcing the buyers to wait 60 days from the point of purchase till they can get the money back. I understand that you're afraid from charge backs but this practice isn't done by any other domain registrar and it's basically holding your clients' money hostage for 2 months on top of a failed sale.

Thanks and again- good luck.

Hi, and thanks for the note and feedback. 2 responses...

First, we probably will not be changing the timing on the expired domain auctions. We certainly understand the points you have raised. On the other hand, we can also report that our most negative customer interactions are with people who fail to renew their domains on time and then lose them to auction, or end up with higher prices in the restoration period. We believe our policies are fair, but we also need to take the experiences shared with us by customers into account. Part of this is to allow the longest grace period possible for renewal, which in turn means we need end auctions right before they enter the restoration period. Hope this makes sense, even though we do of course understand the frustration of bidding on domains only to see them renewed.

Second, we will very likely be getting rid of our 60-day rule regarding refunds of account funds for bids on expired domains that do not work out. I think this will be a thing of the past within the coming days.

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