Declares Record Date of July 25, 2014 and Share Distribution Date
of August 1, 2014
SANTA MONICA, Calif.--(BUSINESS WIRE)--
Demand
Media, Inc.® (NYSE: DMD) today announced that the U.S. Securities
and Exchange Commission (the “SEC”) has declared the Rightside
Group, Ltd. (“Rightside”) Registration Statement on Form 10
effective, and that the Board of Directors of Demand Media has approved
the separation of Rightside from Demand Media in the form of a tax-free
dividend involving the distribution of all outstanding shares of
Rightside common stock to holders of Demand Media common stock on August
1, 2014. Demand Media’s Board of Directors also determined to implement
a reverse stock split of Demand Media’s common stock at a reverse stock
split ratio of 1-for-5 immediately following the distribution. Under the
terms of the distribution and reverse stock split:
-
Rightside common stock will be distributed on August 1, 2014 to Demand
Media stockholders of record as of close of business, New York City
time, on July 25, 2014, the record date for the distribution.
-
Demand Media stockholders will receive one share of Rightside common
stock for every five shares of Demand Media common stock held by such
holders (prior to giving effect to the reverse stock split of Demand
Media shares).
-
Following the distribution, Demand Media will effect a 1-for-5 reverse
stock split of its outstanding and treasury shares of common stock.
Immediately after the distribution is completed, Rightside will be an
independent, publicly traded company, and “regular-way” trading of
Rightside’s common stock will begin the first trading day after the
completion of the distribution. The Rightside stock will be listed on
the Nasdaq Global Select Market (“NASDAQ”) under the symbol “NAME.”
Rightside will own and operate the domain name services business of
Demand Media, and Demand Media will operate as a pure-play
Internet-based content and media company. Neither company will have any
ownership interest in the other.
“We are pleased to have achieved this significant milestone in our
planned separation of Rightside,” said Shawn Colo, Interim CEO of Demand
Media. “This separation will allow both businesses to focus their
resources and attention on their respective strategic objectives to
deliver shareholder value.”
Taryn Naidu, Executive Vice President of Domain Services for Demand
Media, will be Rightside’s Chief Executive Officer upon the separation
of the businesses. Mr. Naidu commented, “Our mission at Rightside is to
advance the way businesses and consumers define and present themselves
online. And as a major participant in the historic expansion of the
domain name space, we are excited about the opportunities to help drive
the growth and personalization of the Internet while also creating value
for Rightside shareholders. As a standalone public company, we plan to
capitalize on our position as a major pure-play domain name services
company. With our registrar and registry businesses each operating at
scale, we provide services to our customers across all aspects of an
Internet domain name.”
Distribution of Rightside Shares to Demand Media Stockholders
As stated above, Demand Media stockholders of record as of close of
business, New York City time, on July 25, 2014 (the “record date”) will
be entitled to receive one share of Rightside common stock for every
five shares of Demand Media common stock held by such holders.
No action is required by Demand Media stockholders to receive the shares
of Rightside common stock in the distribution. Demand Media stockholders
will not be required to pay anything for the Rightside shares or to
surrender any shares of Demand Media stock. The distribution will be
made in book-entry form.
Fractional shares of Rightside common stock will not be distributed.
Fractional shares of Rightside common stock that would otherwise be
distributed to Demand Media stockholders will be aggregated and sold in
the public market. The aggregate net proceeds of these sales will be
distributed ratably as cash payments to the stockholders who would
otherwise have received fractional interests.
Demand Media has received a tax ruling from the U.S. Internal Revenue
Service that, for U.S. federal income tax purposes, the distribution of
the Rightside stock will be tax-free to Demand Media and to its
stockholders, except for any cash received in lieu of fractional shares.
Reverse Stock Split of Demand Media Common Stock
As stated above, a reverse stock split of Demand Media’s common stock at
a reverse stock split ratio of 1-for-5 will be implemented immediately
following the distribution. The reverse stock split is expected to
impact the trading price of shares of Demand Media common stock. Holders
of Demand Media common stock will receive cash in lieu of any fractional
shares of Demand Media common stock resulting from the reverse stock
split.
Trading of Demand Media and Rightside Common Stock
Beginning on or shortly before the July 25, 2014 record date and
continuing up to the distribution date of August 1, 2014, Demand Media
expects that its common stock will trade in two markets on the New York
Stock Exchange: a “regular-way” market and an “ex-distribution” market.
A stockholder of record of shares of Demand Media common stock as of the
record date may choose to sell those shares in the “regular-way” market
after the close of business on the record date and up to the
distribution date, in which case the stockholder will also be selling
the right to receive shares of Rightside common stock in the
distribution. Shares of Demand Media common stock that trade on the
“regular-way” market will trade under the ticker symbol “DMD.” A
stockholder of record of shares of Demand Media common stock as of the
record date may also choose to sell those shares in the
“ex-distribution” market up to the distribution date, in which case the
selling stockholder will retain the right to receive shares of Rightside
common stock in the distribution. Shares of Demand Media common stock
that trade on the “ex-distribution” market will trade under the ticker
symbol “DMD WI.”
Rightside common stock is expected to begin trading on a “when-issued”
basis on NASDAQ under the ticker symbol “NAMEV” on or shortly before the
record date of July 25, 2014. On the first trading day following the
distribution date of August 1, 2014, any “when-issued” trading with
respect to Rightside common stock will end, and “regular-way” trading
will begin under the ticker symbol “NAME.” Investors are encouraged to
consult with their financial advisers regarding the specific
implications of buying or selling Demand Media or Rightside common stock
prior to the distribution date.
The completion of the distribution is subject to the satisfaction or
waiver of a number of conditions, including the Registration Statement
on Form 10 for the Rightside common stock being declared effective by
the Securities and Exchange Commission, the Rightside common stock being
accepted for listing on NASDAQ and certain other conditions described in
the Information Statement included in the Form 10 and in the agreements
filed as exhibits to the Form 10. The condition relating to the
acceptance of the Rightside common stock for listing on NASDAQ has been
satisfied, and the Securities and Exchange Commission has declared the
Form 10 effective. Demand Media and Rightside expect all other
conditions to the distribution to be satisfied on or before the
distribution date.
About Demand Media
Demand Media, Inc. (NYSE: DMD) is a leading digital content & media
company that informs and entertains one of the Internet's largest
audiences, helps advertisers find innovative ways to engage with their
customers, and enables publishers and individuals to expand their online
presence. Headquartered in Santa Monica, CA, Demand Media has offices in
North America, South America and Europe. For more information about
Demand Media, please visit www.demandmedia.com.
About Rightside
Rightside™ inspires and delivers new possibilities for consumers and
businesses to define and present themselves online. The company, with
its affiliates, is a leading provider of domain name services, offering
one of the industry’s most comprehensive platforms for the discovery,
registration, development and monetization of domain names. This
includes more than 16 million names under management, the most widely
used domain name reseller platform, more than 20,000 distribution
partners, an award-winning retail registrar, the leading domain name
auction service through its NameJet joint venture, and an interest in
approximately 100 new Top Level Domain registry operator agreements or
applications through Rightside affiliate, United TLD Holdco Limited,
trading as Rightside Registry. Following its planned separation from
Demand Media, Rightside will be home to some of the most admired brands
in the industry, including eNom,
Name.com
and NameJet
(in partnership with Web.com). Headquartered in Kirkland, WA, Rightside
has offices in North America, Europe and Australia. For more information
please visit www.rightside.co.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, as amended. Statements containing words
such as may, believe, anticipate, expect, intend, plan, project, and
estimate or similar expressions constitute forward-looking statements.
Statements regarding Demand Media’s and Rightside’s future financial
performance and plans for executing the spin-off are based on current
expectations, estimates and projections about our industry, financial
condition, operating performance and results of operations, including
certain assumptions related thereto. Actual results may differ
materially from the results predicted, and reported results should not
be considered an indication of future performance. Forward-looking
statements involve risks and uncertainties including, among others: our
ability to complete the separation of our business into two independent
public companies as described herein and unanticipated developments that
may delay or negatively impact such a transaction; the possibility that
Demand Media may decide not to proceed with the separation of its
business; the high costs we have and will likely incur in connection
with the separation transaction; the expectation that the separation
transaction will be tax-free; revenue and growth expectations for the
two independent companies following the separation; the ability of each
business to operate as an independent entity upon completion of the
separation; the impact of the reverse stock split on the trading price
of Demand Media’s common stock; market conditions in general and those
applicable to the distribution and reverse stock split, including
whether trading commences in the “ex-distribution” and “when-issued”
markets prior to the distribution date as described herein; Rightside’s
ability to successfully pursue, acquire and operate new gTLD registries;
the impact on Rightside’s registry business given its limited experience
in providing back-end infrastructure services to new and existing
registries; the impact of any delays or limitations in introducing new
gTLDs; Rightside’s ability to successfully market and sell its gTLDs;
and the difficulty in predicting and developing consumer demand for new
gTLDs. More information about potential risk factors that could affect
Demand Media’s and Rightside’s operating and financial results are
contained in (i) Demand Media’s annual report on Form 10-K for the
fiscal year ending December 31, 2013 filed with the Securities and
Exchange Commission (http://www.sec.gov)
on March 17, 2014, as such risk factors may be updated in Demand Media’s
quarterly reports on Form 10-Q filed with the Securities and Exchange
Commission, including, without limitation, information under the
captions Risk Factors and Management's Discussion and Analysis of
Financial Condition and Results of Operations and (ii) Rightside’s
Registration Statement on Form 10, as amended, initially filed with the
Securities and Exchange Commission on January 13, 2014. Demand Media and
Rightside do not intend to revise or update the information set forth in
this press release, except as required by law, and may not provide this
type of information in the future.
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Source: Demand Media, Inc.