Neustar $NSR Decides to Split the Company, Investor Webcast Replay

Neustar $NSR stock chart (source: google.com) - stock down over 56% since Aug 2, 2013

In less than three years, Neustar (NYSE: NSR) (domain: neustar.biz) has lost over half of its shareholder value as the chart above indicates, primarily due to the pending loss of its very profitable NPAC contracts. The technology company, which includes domain name registry services (.us, .biz, .co, new gTLDs, etc.), has made the decision to "separate into two independent publicly traded companies: 

• Separation to maximize shareholder value by creating two highly focused companies, intended to be structured as a tax-free spin-off likely to occur over the next 12 months
• One company will focus on Information Services including Marketing, Security and related Data Services (including domain registry services), while the other company will focus on Order Management & Numbering Services, including NPAC Services."

Lisa Hook, currently President and Chief Executive Officer of Neustar, will serve as President and Chief Executive Officer of the Information Services company, which will be rebranded with a new name. Paul Lalljie, currently Senior Vice President and Chief Financial Officer of Neustar, will serve as President and Chief Executive Officer of the Order Management & Numbering Services company, which will retain the Neustar name.

Neustar provided the following information with the announcement:

• Press release;
• Fact sheet (pdf) and announcement fact sheet (pdf) available via webcast (below);
• SEC filing;
• Infographic (an excerpt of which is below);
• Conference call replay available through 11:59 p.m. (Eastern Time) on June 28, 2016 by dialing 1-877-870-5176 (international callers dial 1-858-384-5517) and entering replay PIN 2254013, or by going to the Investor Relations tab of the Company’s website (www.neustar.biz)--Webcast Presentation Click here for webcast replay;
• Any potential separation, which will be subject to final approval by the Neustar Board of Directors, is likely to take approximately 12 months to complete;
• Completion of the transaction is subject to a number of customary conditions, including effectiveness of the Form 10 to be filed with the SEC. Additionally, as the company evaluates the preferred transaction structure, it continues to assess what regulatory and other approvals, if any, may be required to complete the transaction;
• Neustar has retained J.P. Morgan as financial adviser and Gibson, Dunn & Crutcher LLP and Goodwin Procter LLP as legal counsel in connection with the proposed spin-off.

Infographic excerpt (source: neustar.biz) 

See also on Domain Mondo:

• ... Neustar $NSR ... Q1 2016 ... April 28, 2016
• Neustar $NSR Q4 2015 Financial Results, LIVE Webcast Feb 4, 4:30pm ET Feb 4, 2016
• Caveat Emptor: Neustar MarketShare Acquisition, 2016 $NSR Guidance Dec 10, 2015
• Investors Flee Neustar, $NSR Stock Down 19% in Five Trading Days Nov 12, 2015
• Neustar $NSR Shares Tanked Friday After Marketshare Announcement Nov 09, 2015
• Neustar $NSR Will Lose $500 Million Annual Revenue, 80% Downside? Oct 29, 2015
• Neustar Buys Bombora and ARI Registry Services for US$87 Million Jul 31, 2015
• Domain Name Registry Operator Neustar After Losing FCC Vote: Mar 30, 2015

See also on SeekingAlpha.com (subscription):

• NeuStar: Costly Acquisition Strengthens Bear Case by John Zhang 
• Neustar: 80%+ Downside Within 13 Months by John Zhang 
• NeuStar Is Not Good For Your Portfolio by Focus Equity 

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DISCLAIMER

Neustar Buys Bombora and ARI Registry Services for US$87 Million

News: Neustar Acquires Leading Domain Name Registry Provider @BomboraTech http://t.co/NcmosXuY7A #domaining #TLD pic.twitter.com/pcYdXlkdaW

— Neustar (@Neustar) July 30, 2015

Neustar, Inc. (NYSE:NSR), announced Thursday it had acquired Bombora Technologies Pty Ltd (Bombora), based in Australia, for AUD $118.5 million, or approximately USD $86.9 million. Bombora and its subsidiaries, which include ARI Registry Services, provide registry services for a number of top-level domains (TLDs) including .au, .melbourne, .sydney, and over 100 new TLDs. The acquisition expands Neustar's registry services, which operates the .biz, .us, and .co TLDs, in addition to over 300 new TLDs.

“With this acquisition, Neustar continues to gather momentum as a global leader in launching and operating TLDs.” said Lisa Hook, President and CEO of Neustar. “Managing a brand's digital presence through the creation of new TLDs has become a key component of the CMO's tool kit, which aligns with the services we offer in real-time authoritative identity. By combining Bombora’s strong team and market presence in Australia with Neustar’s industry leading organization and technical resources, we are positioned to expand our footprint to the Asia-Pacific region.”

According to Neustar, the Bombora acquisition is expected to contribute approximately USD $8 million in revenue, and about USD $1.1 million, of operating income in 2015, which reflects the adjustment for deferred revenue on a fair value basis in accordance with business combination accounting principles. Over the last two years, Bombora has grown revenue at a compounded annual growth rate of 12% to approximately USD $20.6 million, in 2014 with operating margins between 25% and 30%.

In 2014, Neustar reportedly acquired the registry operator of ccTLD .CO for US$109 million.

Neustar also released its Q2 2015 earnings Thursday which disclosed the following results for the second quarter 2015 compared to second quarter 2014:

• Revenue increased 8% to $256.8 million
• Marketing Services revenue increased 17% to $40.9 million
• Security Services revenue increased 18% to $40.5 million
• Net income increased 22% to $45.1 million
• Net income per share increased 31% to $0.80

Principal domain name of Neustar, Inc. - neustar.biz
Neustar Investor Relations:  http://www.neustar.biz/about-us/investor-relations

About Bombora Technologies:

• AusRegistry is the Registry operator for all Australian commercial domain names such as .com.au and .net.au, and non-commercial domain names like .gov.au and .edu.au.  
• ARI Registry Services provides services including Managed Registry Services for multiple global generic Top-Level Domain clients. ARI Registry Services also sells Licenced Registry Software to international Top-Level Domain clients and provides global anycast DNS services under the DiscoveryDNS brand.
• According to The Australian Financial Review | afr.com: "Bombora was founded 15 years ago by Adrian Kinderis and Simon Delzoppo with one computer, operating out of the front room of Mr Delzoppo's house. The acquisition means a handsome payday for the co-founders, who remain the majority shareholders in the company."

See related posts on Domain Mondo:

• What Does That July 29th Deadline Mean For .brand TLD Applicants?
• New gTLD Domains, the Walking Dead and Dying, ICANN FY15 Results
• ICANN CEO Fadi Chehadé panders to DNA at ICANN 52 (video)
• Blast from the Past: ICANN, New gTLD Domain Names, Conflicts of Interest (video)
• ICANN, Kurt Pritz, Conflict of Interest, new gTLD domain names program

See also: NeuStar's (NSR) CEO Lisa Hook on Q2 2015 Results - Earnings Call Transcript | Seeking Alpha and After losing its biggest contract, this Va. tech company is trying to go global - The Washington Post: "... in March the Federal Communications Commission said it would hand the contract for so-called number portability services to another firm. That work represents about half of Neustar’s business. Neustar has filed suit against the FCC to reverse the decision. But in the meantime, it is beginning to prepare for the transition and search for new ways to make up for the lost business...."


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