Domain wholesale business OpenSRS is set to add around 1.6 million domains under management and 250 resellers as its parent company Tucows has acquired the international wholesale domain reseller channel of Melbourne IT. This brings Tucows to just under 15 million domains under management.
A report by Domain Name Wire said that the transaction was in the range of AUD $8.1-$8.4 million, or “about 4.5x-4.7x FY 2016 EBITDA for the business.”
New customers will immediately have access to more than 600 top level domains, a range of SSL certificates, email services and plugins to popular billing and automation solutions, according to a statement by Tucows on Monday.
“This acquisition represents an excellent opportunity to acquire a loyal, profitable base of resellers that have the same core needs as our existing wholesale customers,” Tucows’ EVP Domains, David Woroch said. “Importantly, the scalability of our OpenSRS platform allows us to meaningfully expand our base of domains under management while adding minimally to our operating costs.”
In a video describing the acquisition, Woroch clarified that Tucows has acquired the international wholesale domain reseller channel of Melbourne IT and that Melbourne IT will continue operating as a domain registrar, focusing on its core markets of Australia, and New Zealand.
“We like [Melbourne IT’s] customers,” Woroch said in the video. “They’re well-run, high-quality hosting companies and ISPs that sell to small business. They complement our resellers very nicely. Over the years wholesale domain registration has become a lower margin business. We think it benefits from increased transactions, scale, and efficiency.”