CentralNic Group PLC

Internet Service Platforms

Visit the CentralNic Group website
Status Current
Period Dec 15 – current
Headquarters London, UK

During the course of Kestrel’s Investment:

Market Cap Increased

7.6x to £291m

Revenue Up

25x to $385m

Adjusted to EBITDA Up

14x to $42.5m
Sources: Market cap LSE at 30 Sep 21, financials Zeus Capital 22 Nov 21 forecasts FY21

Company

CentralNic is a leading supplier of online presence and marketing services via a globally automated software platform.  The company provides its services to resellers, multinational corporates as well as nationally based small businesses. Through an acquisition led strategy funded by debt and equity, the company has become a leader in the domain name market servicing 28 million names, representing 13% of the world’s domains.

Investment rationale

  • Operates in a non-cyclical growth market with limited churn
  • Attractive platform asset in a fragmented but rapidly consolidating industry
  • Market dynamics underpinned by rapid growth in internet and mobile data traffic
  • Recurring and repeat revenues contribute 99% of total
  • Negative working capital arising from advance payment for domain names
  • Geographically diversified with non-sterling revenue base
  • Cash conversion targeted at over 100%

Kestrel involvement, actions and impact

We acquired an initial 8% stake in CentralNic 2015, and have since increased this holding, acquiring shares in the market and participating in fundraising to support the CentralNic’s acquisition-led growth strategy. As at 30 September 2021, we were the largest shareholder in the company with a 23% holding.

We have actively challenged and supported management in their acquisition strategy, providing finance as deemed appropriate, but also advocating for robust post acquisition integration plans.