Team Internet tanks as Verdane walks away
By Michele Maatouk
Date: Tuesday 04 Mar 2025
(Sharecast News) - Team Internet tanked on Tuesday after Verdane confirmed it was not planning to make an offer for the online marketing and web services firm and as it downgraded earnings guidance for its search segment.
Team Internet announced on 7 January that it had been approached by TowerBrook Capital Partners and Verdane, each of which proposed a price of 125p per share.
Towerbrook said a few days later that it was not planning to make an offer.
AIM-listed Team Internet said on Tuesday that it remains confident in its "fundamental prospects and business".
"Team Internet is a highly profitable and cash-generative business and, as announced on 11 November 2024, continues to explore options to increase shareholder value including optimising its capital allocation strategy, as well as a comprehensive review of its asset ownership," it said.
"The interaction of the board with the two recent inbound approaches (as noted in the announcement on 7 January 2025) was consistent with the board's efforts to maximise shareholder value."
Team Internet said it had also received repeated approaches for its Domains, Identity & Software (DIS) segment, which continues to trade strongly.
The company said it now expects 2025 adjusted earnings before interest, tax, depreciation and amortisation for its search segment of between $20m and $25m, down from $57m in 2024, as it shifts towards Google's latest monetisation product, Related Search On Content (RSOC).
However, 2025 adjusted EBITDA for the DIS and Comparison segments is still expected to be between $40m and $43m, up from $36m a year earlier.
That gives a range of between $60m and $68m for group Adjusted EBITDA in 2025, before a return to double-digit earnings growth from 2026 onwards.
"As a leading provider of domain monetisation and digital advertising solutions, Team Internet has been preparing for the arrival of Google's latest monetisation product, RSOC and Team Internet's transition to RSOC," it said.
"RSOC is core to the transformation of our search segment into a content and video publishing powerhouse and offers an enhanced user and advertiser experience, as indicated in our November 2024 investor presentation.
"The market development has been long-anticipated, though the announced acceleration is a challenge. It is anticipated that, during this transition period, contributions from AdSense for Domains will decline faster than contributions from RSOC appreciate, meaning that the financial performance of Team Internet's Search segment will see a trough in 2025 before it recovers from 2026 onwards and returns to the long-term pattern."
At 1000 GMT, the shares were down 37% at 62.14p.
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