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Afilias cancels $100m London IPO

Kevin Murphy, January 6, 2015, Domain Registries

Afilias has cancelled its planned London Stock Exchange IPO due to “market conditions”.

It seems to be a cancellation, rather than a postponement, according to a company spokesperson.

“The final decision to cancel the IPO was based on market conditions at the time,” she told DI today.

No additional information was available, but I suspect the company was not able to drum up sufficient interest, at its target price, from institutional investors in the two-week period between its IPO filing and its due date.

Afilias said on October 28 that it planned to raise approximately $100 million selling shares on London’s Alternative Investment Market.

The flotation was expected to take place November 12, but that date came and went with no action.

AIM is currently the home of rival TLD registries CentralNic and Minds + Machines, neither of which saw any particular share price problems during that two-week window.

Afilias had revenue of $77.6 million in 2013, making an operating profit of $30.4 million and $45 million in operating cash flow, largely from selling .info and .mobi domain names.

The company is the back-end provider for almost 50 live 2012-round new gTLDs and has a couple hundred more deals with applicants whose strings have not yet been delegated.

Afilias set for $100m London IPO

Kevin Murphy, October 21, 2014, Domain Registries

London’s Alternative Investment Market is fast becoming the stock market of choice for new gTLD registries, with .info mainstay Afilias today announcing an upcoming IPO.

The Ireland-based company hopes to raise $100 million by selling off about 30% of the company, giving it a growth war-chest and giving its investors a shot at getting some of their money back.

Afilias earmarked part of the expected windfall for new gTLD auctions, as well as acquisitions of new gTLD “assets” and operational registries and expansion of its registrar business.

Executive chairman Jonathan Robinson said in a statement:

The Placing will bring significant benefits – by providing further capital to fund our organic and acquisitive growth plans, and raising our corporate profile with existing and new customers.

In addition to .info, .mobi and .pro, Afilias is associated with 254 new gTLD applications either as applicant or back-end provider. As registry, it already has about a dozen 2012-round gTLDs in the root.

The company’s revenue for 2013 was $77.6 million, up from $74.5 million in 2012. Earnings before deductions were $38.6 million in 2013, up from $32.1 million in 2012.

Fellow gTLD registries CentralNic and Minds + Machines are also listed on AIM.

Breaking: Go Daddy files for $100 million IPO

Go Daddy has filed its S-1 registration form with the US Securities and Exchange Commission, signalling its intention to go public.

The filing reveals the company plans to raise $100 million with the share sale.

Go Daddy’s revenue for 2013 was $1.1 billion, up from $910.9 million in 2012, the filing reveals.

But the company said it uses “bookings” as a measure of its success, due to the way its revenue is collected up-front but recognized on its books over the term of the domain or hosting contract.

Bookings were $1.4 billion in 2013, up from $1.25 billion in 2012.

Go Daddy is loss-making, recording a net loss of $199.8 million in 2013 and $279 million in 2012.

The company has 57 million domains under management and hosts 8.5 million web sites, according to the S-1. Those are spread between 12 million customers, a number that grew by 1.3 in 2013.

A surprising 24% of its sales come via its customer service people; the rest comes through its web site.

Go Daddy planned to IPO in 2006, but subsequently yanked the offering due to “market uncertainties” and then-CEO Bob Parsons’ apparent discomfort with the process.

In 2011 the company was taken over by the investment firms KKR, Silver Lake Partners, and Technology Crossover Ventures, paying a reported $2.25 billion for a 65% stake.

Since then, an eventual IPO has not been a matter of if, but when.

I’m tweeting more nuggets from the S-1 as I find them.

Donuts looking for accountant with IPO experience

Kevin Murphy, February 21, 2014, Domain Registries

Anyone want to take bets on Donuts’ exit strategy?

The largest new gTLD portfolio applicant has placed a job ad on its web site for an accountant with “Understanding of SEC and/or IPO related accounting”.

That’s SEC for Securities and Exchange Commission and IPO for Initial Public Offering, of course.

It appears IPO experience is a desired quality of the sought-after individual, rather than a must-have, but it seems to point to where Donuts plans to take the company in future.

Donuts of course now has revenue, and it’s been almost two years since it raised its first $100 million venture capital investment in a funding round led by Austin Ventures.

That a VC-backed tech company should be eyeing an eventual IPO should not come as a surprise to anyone — and I wouldn’t expect to see an S-1 any time soon — but it does look like Donuts is already planning for its exit when it comes to its staffing arrangements.

(Thanks to Silver Siwei Wang for the tip).

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.

CentralNic raises $10 million in IPO

Kevin Murphy, September 3, 2013, Domain Registries

New gTLD registry back-end provider CentralNic raised a reported £7 million ($10 million) on its London Alternative Investment Market debut yesterday.

The IPO, which netted £5 million for the company and £2 million for existing shareholders, valued the company at £32.5 million ($50.6 million).

Its float price was 55p per share, but it’s trading at 66p right now.

CentralNic had previously said that it intends to use the money to expand its new gTLD business and to explore opportunities to provide back-end services for ccTLDs.

The company runs .la, has contracts to run 53 gTLDs, and sells subdomains under numerous pseudo-gTLDs such as uk.com and us.com.

CentralNic earmarks IPO money for new gTLDs

Kevin Murphy, August 13, 2013, Domain Registries

CentralNic this morning formally confirmed that it plans to float on the Alternative Investment Market in London and said the money raised will help it buy stakes in new gTLDs.

The London-based company plans to hit the market at the beginning of September. CEO Ben Crawford told The Telegraph yesterday that the company hopes to raise £5 million ($7.7 million) with the IPO.

CentralNic said in a press release this morning:

The Directors believe that the funds raised for the Group by the placing of shares will allow the Group to enhance its global distribution network, acquire interests in new gTLDs, expand its own retail business and obtain contracts from governments to operate their country code TLDs (“ccTLDs”), especially in developing markets.

While the company is best-known for running pseudo-gTLDs such as us.com and uk.com, it also provides the back-end for the repurposed ccTLDs .la and .pw and has 60 new gTLD back-end contracts, 25 of which are uncontested.

Crawford said in the press release:

We are profitable, debt free, asset backed and about to capitalise on the major changes being made to the internet with the influx of new TLDs. We already have in place the required IT infrastructure and global retailer network. We have also been awarded a significant number of new TLD contracts so the Company is confident of expanding rapidly.

According to The Telegraph, the IPO could value the company at £30 million ($46.4 million).

The Alternative Investment Market is the low-cap little brother to the London Stock Exchange. CentralNic will be the second registry, after Top Level Domain Holdings, to list there.

Go Daddy IPO “not off the table”

Go Daddy may be on the IPO track with its new investors and management.

Speaking to the Wall Street Journal about the possibility of going public, CEO Blake Irving said:

It’s not off the table. We’re growing at double digits [in terms of percentage] on the customer side, on revenue, on earnings, so the opportunity for us to have an IPO is quite good. The board is quite supportive of taking that direction, if that’s what we want to do.

Go Daddy famously yanked its planned IPO in 2006 just weeks before it was set to execute, apparently at the whim of then-CEO and majority owner Bob Parsons.

Since then, Parsons has taken a lower profile role at the company, and his shareholding was diluted to reportedly lower than 35% by an investment from KKR and Silver Lake Partners reportedly worth over $2 billion.

The short WSJ interview also reveals a few other interesting tidbits, such as the fact that Irving commutes to Go Daddy’s Arizona headquarters by plane once a week.

Go Daddy sale to make Bob Parsons a billionaire

Number one domain name registrar Go Daddy is in talks to sell out to private investors in a deal worth north of $2 billion, according to reports.

The deal, first reported by the New York Post and subsequently confirmed by other newspapers, would see the company acquired by a group led by Silver Lake Partners and KKR & Co for between $1 billion and $2.5 billion.

An official announcement could come as soon as Tuesday, these reports said.

Go Daddy has been subject of exit strategy rumors before, notably late last year, and it came to nothing, but this time it’s looking like a done deal.

The company also attempted to go public in 2006, but its IPO was yanked due to poor market conditions and other reasons.

In fact, IPOs appear to be the exception rather than the rule when it comes to domain name registrars.

Register.com did go public, but it didn’t work out too well and it was reprivatized. Network Solutions also wound up in private hands. Demand Media listed last year, but eNom is not its core business.

For many, Go Daddy is synonymous with its flamboyant chief executive, Bob Parsons, who founded the company in 1997 with the proceeds of a previous technology company sale.

As the company’s primary shareholder, the sale will likely make him a billionaire. The question is: as a serial entrepreneur, how long will Parsons stick around?

He’s a pretty good businessman, to be sure, but he’s never struck me as somebody who’s particularly passionate about the domain name industry.

I expect he’ll stick around for a while to groom his successor after the sale closes – it may even be a condition of the deal – but I’d be surprised if he’s still at the helm two years from now.

I understand there are also a number of senior Go Daddy executives with share options; we’re likely to see these guys on the receiving end of windfalls if the deal goes through.

I’ll also be interested to see how new ownership will affect Go Daddy’s philanthropic work.

The company does not like to talk about it (more than three or four times a month) but it does contribute a fair bit to charitable projects.

I don’t think new management will attempt any kind of drastic shake-up of Go Daddy’s business model, such as raising prices, in the short term.

The company has a winning formula that is not in need of fixing right now.

Go Daddy lobbies to delay its IPO

Go Daddy is reportedly behind proposed US legislation that would make it easier for large privately-held companies to keep their financial records secret.

(UPDATE: This post sources a New York Post report, but according to a Go Daddy spokesperson, the company had “nothing to do with” the proposed legislation.)

If the new Private Company Flexibility and Growth Act becomes law, it would enable Go Daddy to avoid being compelled into an IPO.

The bill was introduced by Arizona’s Rep. David Schweikert and other bi-partisan Congressmen yesterday. In interviews, Schweikert talked of having the law pass by the end of the year.

Today, when private companies hit 500 shareholders they have to start publicly disclosing their accounts, by filing their financial statements with the Securities and Exchange Commission.

This creates substantial costs, and in the past many companies (Google is an example) choose to go the IPO route instead, even if they don’t necessarily want to.

The new bill would allow them to stay private, in both senses of the word, for longer.

Schweikert told Fortune that the bill was inspired by “a bunch of little companies” in his Scottsdale constituency. The New York Post reported that Go Daddy was among them.

Go Daddy filed for an IPO in May 2006, but canceled the offering a few months later, citing poor market conditions and conflicts with CEO Bob Parsons’ management style.

In September last year, the company put itself up for sale, with a reported asking price of between $1.5 billion and $2 billion, but the auction was called off a few weeks later.

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