SEATTLE – In a deal reportedly involving $10 million in cash and $31 million in stock, Minds + Machines Group Ltd (MMX) has entered into a conditional agreement to “acquire the entire membership interests” of ICM Registry LLC, the operators of the top-level domains .xxx, .porn, .sex and .adult.

According to a press release issued Friday morning, the acquisition is “conditional upon regulatory approval by ICANN,” approval which is expected to come by the end of June.

“We are delighted to have entered this agreement,” said Toby Hall, the CEO of MMX. “We expect the Acquisition to be earnings enhancing in the current year and believe it will deliver scale, strong recurring revenues and positive working capital to the Company in 2018 and future years. Further, it will strengthen the quality of our revenues, both accelerating MMX’s already fast-growing renewal base and improving the geographic make-up of our sales, given ICM’s revenues are primarily derived from the US and Europe.”

As part of the deal, Stuart Lawley, the outgoing CEO of ICM, reportedly will become the largest shareholder in MMX, with a holding of just over 15%.

“I strongly believe ICM’s shareholders, customers and employees will be well served by this acquisition,” Lawley said. “MMX has a very dynamic management team. We received 4 offers in total for the business, some all cash and others a mixture of cash and stock. After lengthy, detailed negotiations and due diligence with the interested parties, the arrangement with MMX was clearly the best fit.”

According to the statement released by MMX, last year “approximately 78% of ICM’s revenue was renewal based and approximately 14% was generated from premium sales,” and the company “generated net sales of $7.27 million and net income of $3.5 million, from approximately 100,000 registrations.”

In addition to Lawley becoming the largest shareholder of MMX, under the terms of the transaction, the other five remaining senior managers of ICM “will all have meaningful stock holdings in MMX.”

“We felt it was appropriate to reward all of our staff for their loyal, sterling and diligent efforts over the last 8 years and in particular the senior management team who will now become shareholders in MMX,” Lawley said. “Their long term interests are perfectly aligned with the selling ICM shareholders and existing MMX holders. As they forge their new careers within the greater MMX group, they will hopefully be able to share more directly in the results of the fruits of their labor.”

Hall described the acquisition as a logical outgrowth of MMX’s business model and approach to the market.

“2017 has been about proving out the business model: firmly locking-in the operational gains of 2016 to ensure a profitable base, and developing a long-term growth strategy,” Hall said. “It cements MMX’s position as a leading registry group in the new gTLD sector as we develop into a long-term annuity based business.”