Domain and hosting giant Go Daddy Group said today that it has agreed to “receive a strategic investment and enter into a partnership” with KKR, Silver Lake and Technology Crossover Ventures (TCV). Financial terms of the transaction were not disclosed, and the release from Go Daddy did not address whether it was selling a controlling stake to the investment firms.
Founded in 1997, Go Daddy serves more than 9.3 million global customers and manages more than 48 million domain names. The Scottsdale, Ariz. company is the world’s largest provider of domain names and shared hosting.
Parsons: “Right time, right partners”
“I’ve always said we would make a move like this when the right deal with the right partners could help us do the right thing for our customers and our employees,” said Go Daddy CEO and Founder Bob Parsons. “This is it! We are partnering with KKR, Silver Lake and TCV because of their technology expertise, their understanding of Web based businesses and because their values align with ours. We believe, together, we will take the company to the next level, especially when it comes to accelerating international growth.”
“Go Daddy is powerfully positioned for future growth as it continues to innovate and add to its truly unique platform of cloud-based software and services,” said Greg Mondre, Managing Director, of Silver Lake said. “At the same time, we plan to maintain and augment all of the attributes that have made Go Daddy a clear market leader today.”
Go Daddy is owned by Bob Parsons, a self-taught programmer and entrepreneur. After serving in the U.S. Marines and earning a Purple Heart in Vietnam, Parsons founded Parsons Technology, an accounting software business that he sold to Intuit in 1994 for $64 million. He founded Go Daddy in 1997 and entered the domain business in 2000.
Brief Run at an IPO
in 2006 Go Daddy announced plans for an initial public offering in which it hoped to raise $200 million. The company later canceled those plans, citing poor market conditions.
At the time, Parsons also said Go Daddy’s losses and financial performance had been misunderstood due to deferred revenue from products that have been paid for but not delivered, such as multi-year registrations of domain names and SSL certificates. While the sale of these products provides Go Daddy with excellent cash flow, the revenue cannot be applied to earnings until the product is delivered on its renewal date.
Qatalyst Partners served as the exclusive advisor to Go Daddy in connection with the transaction. Barclays Capital, Deutsche Bank Securities, Inc. and RBC Capital Markets acted as financial advisors and, along with KKR Capital Markets, they or their affiliates provided financing commitments for the transaction.