PALM BEACH GARDENS, Fla. — Minds and Machines, a top-level domain registry service provider, has acquired ICM Registry, the operator of the .xxx, .porn, .sex and .adult gTLDs.
In a $41 million cash-and-stock deal, Minds and Machines is paying $10 million in cash funded from the company's existing cash reserves and a total of 225 million new ordinary shares with an equivalent value of approximately $31 million.
The acquisition is conditional on receiving approval from ICANN.
ICM’s four TLDs will be added to Minds and Machines’ portfolio of 28 extensions, which have more than 1.4 million registrations.
Stuart Lawley, outgoing CEO of ICM, said there had been increasing consolidation in the TLD operator market and ICM’s stable of highly profitable domain extensions attracted several offers from rival portfolio operators.
“Having successfully built and sold several technology businesses throughout my career in other consolidating markets, it became clear over the last few years that ICM’s business, shareholders and employees would be best served as part of a larger group with the corresponding resources, vision, opportunities and obvious cost savings that would bring,” Lawley said.
“I strongly believe ICM’s shareholders, customers and employees will be well served by this acquisition; Minds and Machines has a very dynamic management team,” Lawley said. “We received four offers in total for the business, some all cash and others a mixture of cash and stock. After lengthy, detailed negotiations and due diligence with the interested parties, the arrangement with Minds and Machine was clearly the best fit.”
Santa Monica, Calif.-based Minds and Machines is listed on the London Stock Exchange’s AIM market under the MMX symbol.
With the deal, Lawley will become the largest shareholder in Minds and Machines with a holding just over 15 percent and as part of the transaction, the five remaining senior managers of ICM will all have meaningful stock holdings in Minds and Machines.
With the exception of Lawley, who is leaving to pursue blockchain based age-verification business opportunities with his new business, AVSecure.com, the rest of the existing management team will remain with ICM, which is based in Palm Beach Gardens, Fla.
Back-end registry services will continue to be provided by Afilias, which has been a shareholder in ICM and will now become a sizeable and welcome shareholder in Minds and Machines going forward.
Lawley said he felt it was appropriate to reward all of its staff “for their loyal, sterling and diligent efforts over the last eight years and in particular the senior management team who will now become shareholders in Minds and Machines.”
“Their long-term interests are perfectly aligned with the selling ICM shareholders and existing Minds and Machines holders,” Lawley said. “As they forge their new careers within the greater MMX group, they will hopefully be able to share more directly in the results of the fruits of their labor.”
“As part of our detailed due diligence on our potential suitors we were particularly impressed with both Minds and Machines CEO Toby Hall and Minds and Machines COO/CFO Michael Salazar, who struck us as competent business managers in possession of the drive and vision needed to develop and execute a long-term growth strategy in the top-level domain sector,” Lawley said.
“We believe they are the ideal stewards for the ICM properties going forwards. With our specialty TLDs there goes great reward but also great responsibility, so we had to be very careful about who we chose to carry that torch going forward. I am delighted it will be Minds and Machines.”