Tucows Inc. and Hostopia.com yesterday signed a definitive agreement for Hostopia to purchase certain of Tucows' shared hosting customer assets including approximately 14,000 Domain Direct, NetIdentity and ItsYourDomain.com (IYD) customer accounts.

Hostopia will pay US$1.6 million in cash for these assets, with adjustments made on closing. This amount is payable 20% on signing of the agreement and 80% upon the closing of the transaction, which is scheduled to occur on May 15, 2008. The companies plan to migrate these accounts to Hostopia's unified web service platform by July 2008.

"I am confident these shared hosting customers will enjoy quality service and support with Hostopia directly," said Elliot Noss, President and CEO, Tucows. "This move is the first part of a strategy to reposition our retail business to help individuals and small businesses build their identities online."

"We are very pleased to have concluded this transaction. We are already hosting some of the Tucows Retail Service Group's users so the impact on customers should be minimal," said Colin Campbell, CEO, Hostopia. "Our plan is to provide customers with numerous upgrades and additional value-added services to earn their loyalty and continued business. Traditional web hosting is fast evolving to the SaaS (software as a service) model and Hostopia is perfectly positioned to offer these services to these customers."

The companies indicated that accounts involved in the transaction will continue to be served under the familiar Domain Direct brand, which will operate as a managed service by Hostopia.