Go Daddy president Warren Adelman will assume the role of CEO following the deal
Every now and then, an exciting or controversial issue triggers a flood of online discourse. For our Noise Filter feature, the WHIR pans the raging rivers of opinion for shining nuggets of useful commentary.
(WEB HOST INDUSTRY REVIEW) — Just in time for the Independence Day long weekend, the Go Daddy Group announced last week it had partnered with KKR, Silver Lake and Technology Crossover Ventures in a “strategic investment” agreement.
The announcement finally resolved ongoing rumors that the world’s largest domain registrar and hosting provider would sell for somewhere between$2 billion and $2.5 billion.
Days before Go Daddy made the announcement, Richard Poplack of The Daily Maverick addressed the “obvious question,” is GoDaddy “massively overvalued?”
The company reportedly posted revenue of between $750 and $800 million in 2009, and it grows, customer-wise, by about 10% a year. That’s all anybody really knows. It certainly advertises with swagger. GoDaddy has become known for its sexy Super Bowl ads, which feature young ladies not unlike [Danica] Patrick in a series of entertaining and rather revealing situations. Yes, it is a going concern, and it makes some noise on the telly. Ergo, it must be worth the money.
But when Go Daddy finally announced the investment deal late Friday evening, many news outlets, including Reuters and The Wall Street Journal, mistakenly reported the deal as an outright acquisition.
Parsons will continue to be the largest shareholder in the company and assume the role of executive chairman of the board. Meanwhile, former president Warren Adelman will take over Parsons’ role as the company’s new CEO.
In an interview with Parsons, Domain Name Wire discussed just how big a payday the investment deal was for Parsons and members of Go Daddy’s senior management.
Before the deal Parsons owned 78% of the company and employees owned 22% through stock options. Both Parsons and the employees benefited from the investment, with 36 employees getting $1 million-plus checks. All of the senior management invested in the deal and a number of people with options rolled some of it into stock in the company… [Parsons] explained that the investors’ experience in overseas markets and technology will help the company grow. The company may also make acquisitions, such as to help the company offer a greater range of cloud based services… Parsons would not disclose the amount of investment, but when I asked him about reports of $2.25 billion he said “it might be close.”
All three equity firms are considered major investors in the IT industry, with Silver Lake being a large investor in both Skype and Groupon.
CRN’s Andrew R Hickey highlights the driving factors behind the Go Daddy investment, citing a statement from Silver Lake’s managing director.
It’s Go Daddy’s cloud-ready future that enticed investors, according to statements from the three firms that contributed. Those firms have been heavy hitters in the tech space, and most recently KKR hired HP’s former networking chief Marius Haas as an industry advisor… “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,” Greg Mondre, managing director, of Silver Lake said in a statement. “At the same time, we plan to maintain and augment all of the attributes that have made Go Daddy a clear market leader today, including world class customer support and competitive pricing for its 9.3 million customers.”
Finally, a report by The Phoenix Business Journal gave further insight into what the investment means for Go Daddy’s future.
With part of the investment, Parsons said he plans more charitable giving through a foundation he and his wife will set up. Much of those contributions will center on the Valley. The company also will maintain and probably expand its Arizona operations, Parsons said, which means it likely will add more jobs as it continues to grow… The deal, announced Friday, will change a lot for Go Daddy. The brand already is the most dominant domain registrar in the world. The investment, and particularly the connections the three investment firms bring to the table, also will make future acquisitions a little easier, Parsons said.
No related posts.
