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Endurance losing founder-CEO next week

Kevin Murphy, August 16, 2017, Domain Registrars

Endurance International, the parent company of registrar brands including Public Domain Registry, BuyDomains, Domain.com and BigRock, will see its founding CEO resign next week.

The company said this week that Hari Ravichandran will be replaced by Jeff Fox, most recently chair of customer relationship management software vendor Convergys, on August 22.

Endurance, which makes about 12% of its revenue from domain registrations, had disclosed Ravichandran’s plan to move on back in April, when it was characterized as an effort to move the company to the next stage of growth.

But it comes in the context, as the company has acknowledged, of an ongoing Securities and Exchange Commission investigation into its 2015 acquisition of Constant Contact.

The SEC probe has been going on since at least December 2015.

Endurance is also facing flattening top-line growth — revenue of $292.3 million, up 1% on last year, in the second quarter — and deepening losses.

Fox was CEO of Convergys from 2010 to 2012. He is also principal of The Circumference Group, his own investment/advisory firm.

Domain.com owner files for $400m IPO, to spend $110m buying Directi

Kevin Murphy, September 10, 2013, Domain Registrars

Endurance International, owner of Domain.com and HostGator, plans to raise up to $400 million in a Nasdaq IPO, and said it will spend up to $110 million of that buying Directi, India’s largest domain registrar.

As part of the proposed acquisition, Endurance has also agreed to bankroll Directi’s new gTLD auctions to the tune of $62 million.

The acquisition is not final, and appears to depend on a number of targets related to the IPO and Directi’s revenue performance. Endurance’s S-1 filing with the US Securities and Exchange Commission reads:

In August 2013, we entered into a master share purchase agreement to acquire all of the outstanding capital stock of Directi from Directi Holdings, the seller, for an amount we estimate will be between $100 million and $110 million in cash or, at the election of the seller, a combination of cash and shares of our common stock, subject to the satisfaction or waiver of specified customary closing conditions and the achievement of specified financial targets.

The acquisition would close in the fourth quarter this year.

As well as running a top-ten registrar (and a few dozen others), Directi subsdiary Radix Registry has 29 active new gTLD applications, 26 of which are contested.

Endurance proposes to help Radix win these contention sets. On new gTLD auctions, the S-1 says:

in connection with our proposed acquisition of Directi, we entered into agreements with entities affiliated with Directi Holdings related to participation in the auction of new top level domain extensions and domain monetization activities, pursuant to which, among other things, we may be obligated to make aggregate cash payments of up to a maximum of approximately $62 million, subject to specified terms, conditions and operational contingencies.

Endurance is a complicated company. Its most familiar brands include Domain.com, iPage, FatCow, Homestead, Bluehost, HostGator, A Small Orange, iPower and Dotster.

But since December 2011 it has been controlled and majority owned by Warburg Pincus and Goldman Sachs, which paid a reported $975 million.

Its annual revenue for the last three calendar years has been $87.8 million, $190.3 million and $292.2 million. It’s currently not profitable, recording a net loss of $139.2 million in 2012.

It has seven million domains under management and had 3.4 million customers at the end of June 2013.

Judging by the S-1, the company has over a billion dollars of debt. Directi acquisition excluded, most of its IPO proceeds would go towards paying off some of that debt.