I've met Web.com's (NASDAQ: WWWW) CEO Jeff Stibel several times. When he came on board the company about two years ago, things were fairly bleak. The hosting company was bleeding lots of red ink and had no vision.That changed quickly with Stibel. He cut costs and remade the company by changing the branding, adding new services and putting together some key alliances.
It was all encouraging. But despite everything, Wall Street was not responding. Then again, in the small cap world, it's not easy to get the attention of investors and analysts.
So last week, Web.com agreed to sell out to Website Pros (NASDAQ: WSPI) for $6.5233 per share or $129 million.
In the combination, there will be much more scale to attack the large market opportunity for small and medium size business (SMB) web sites. There are about 25 million in the US.
With the Deal, Website Pros will have $117 million in annualized revenues and 234,000 paid subscribers. But as more and more SMBs move to the Net, Website Pros will continue to benefit and I think get the attention of investors as well.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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