Edison Investment Research - CentralNic Group (CNIC) CentralNic Group - Acquisition of Aporia for up to US$19m

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Edison Investment Research

Richard Williamson

CentralNic Group - Acquisition of Aporia for up to US$19m

As part of a broader vertical integration strategy, disintermediating its value chain to create a more efficient ecosystem, CentralNic has announced the acquisition of MA Aporia, a media and native advertising company. CentralNic is paying an initial cash consideration of US$11.2m, together with performance payments of up to US$7.8m for FY22–24. This implies an initial FY21 EV/EBITDA multiple of 5.6x. The acquisition will be immediately earnings accretive. As Aporia is already an exclusive supplier to CentralNic, the transaction will increase CentralNic’s margins but will have no impact on revenue. Aporia generated FY21 revenue of US$35m, gross profit of US$3.5m and EBITDA of US$2.0m. Despite CentralNic’s continuing momentum (H122 organic growth of 62%), the group trades on c 5.9x FY22 EV/EBITDA and a P/E of 8.0x.

15/09/2022 1 EN

Underlying

CentralNic Group

CentralNic Group is a holding company which provides global domain name services. Co. provides Wholesale, Retail and Enterprise services and consultancy for new Top Level Domains (TLDs), Country Code TLD's and Second-Level Domains and it is the owner and registrant of a portfolio of domain names, which it uses as SLD domain extensions and for resale on the domain name aftermarket. The Wholesale Division powers domain names and sells them via an integrated network of third party retailers; the Retail Division sells domain names and related services to end users; and the Enterprise Division sells domain names and related services, consultancy services and licenses software to corporations.

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GB00BCCW4X83 London Stock Exchange United Kingdom

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Richard Williamson

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