Technology specialist Silver Lake Partners, which enjoyed a recent windfall following the sale of voice-over-internet protocol company Skype to Microsoft in May for $8.5 billion, has partnered with KKR and venture capital firm Technology Crossover Ventures to acquire The Go Daddy Group.
Although financial terms of the deal were not disclosed, the consortium is understood to have paid $2.25 billion for the Arizona-headquartered company. KKR and Silver Lake will hold equal stakes in the business, with TVC as a minority shareholder, according to a source with knowledge of the deal.
Go Daddy’s founder and chief executive Bob Parsons, who was criticised for publishing a video of him shooting an elephant in Africa on the internet, has re-invested “hundreds of millions of dollars” in the company as part of the deal and retains a significant minority stake, the source said. He will become the company's executive chairman once the deal completes, the source added, with Warren Adelman – currently president and chief operating officer of the company, taking up the role of chief executive.
The buyout demonstrates Silver Lake's appetite for large deals is by no means sated in the wake of its Skype success, and its continuing willingness to work alongside other sponsors.
Silver Lake and KKR have worked together before on deals, most notably on the $10.6 billion buyout of NXP Semiconductors in 2006, the $11.3 billion buyout of SunGard Data Systems in 2005, and Avago Technologies the same year for $2.7 billion. The two firms are also working on another, unnamed, acquisition together, according to a source close to the firms.
Go Daddy appointed boutique Qatalyst Partners to advise it on the sale process. Barclays Capital, Deutsche Bank and BRC Capital Markets acted as financial advisors. All three, as well as KKR’s in-house debt arm (KKR Capital Markets) provided financing for the deal.
The company, which sponsors racing driver Danica Patrick, the first woman to win an IndyCar race, is known for its 'racy’ Superbowl advertisements in the US. It has more than 9.3 million customers worldwide, according to a statement, and manages more than 48 million domain names.
Founder Bob Parsons said in a statement: “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. Together, we will take the company to the next level, especially when it comes to accelerating international growth.”