auDA’s recent decision to backflip and enter exclusive negotiations with AusRegistry for a renewal of the existing Registry Agreement (instead of going out to tender as they previously committed to do) could be snuffed out in its infancy.
Why? Overnight I read that Neustar (effective owner of AusRegistry) has entered into an agreement to sell out to a private investment group in the USA. If it does proceed to finalisation, this is envisaged for the 3rd quarter in 2017.
This is a snippet from Michael Berkens at “The Domains”:
“Neustar, Inc. (NSR), today announced that it has entered into a definitive agreement to be acquired by a private investment group led by Golden Gate Capital in a transaction valued at approximately $2.9 billion.”
And this from Andrew Allemann at Domain Name Wire:
“The deal comes at a pivotal time for the company, which is about to lose its $500-million-a-year Number Portability Administration Center (NPAC) contract with the U.S. government. It has been on an acquisition binge to grow revenue in anticipation of losing the contract. Among the domain name companies it has acquired are .co and Bombora Technologies (which owns ARI Services).”
Here’s The Thing
I’m not a lawyer, but I do know that it is commonplace for any service agreement to have provisions about assignment and “change of control”. So I went and had a look at the Registry Licence Agreement document as proposed by auDA back in 2005.
And sure enough, here they are:
The definition of “Relevant Control” in the same document is this:
If auDA is trying to justify their sudden haste (and backflip) to try and strike a new deal with the current operator, then this surely has to put a spanner in the works.
There must be Australian owned enterprises that would like to have the opportunity to at least be considered for the tender?
The simple fact is this. If you go out to tender, you see who else may be interested. And it’s going to be a “big pie” – particularly if direct registrations are part of the mix.
Nothing to stop AusRegistry / Bombora / Neustar / Golden Gate Capital putting in a tender. And given their past experience, they should be in the box seat.
It is incumbent on the Directors of auDA to try and achieve the best possible deal for the organisation. Directors obligations 101.
What do you think?
Ned O’Meara – 15th December 2016