GoDaddy Prepares for IPO
Company to Interview Underwriters in Coming Weeks — GoDaddy Group Inc., the Internet company that helps individuals and businesses create websites, is preparing for an initial public share offering, said people familiar with the matter.
Context & Ripple Effects
GoDaddy's move toward the public markets closes a loop opened in July 2011, when the domain registrar agreed to sell itself to KKR and Silver Lake rather than pursue an IPO on its own. A take-private followed by a public listing three years later is the classic private-equity holding pattern: restructure under private ownership, then return to the market once the story can be told to public investors.
The preparation is still unofficial — sources describe underwriter interviews planned for the coming weeks, and no filing exists yet — but the breadth of pickup on the same-day report, from Reuters and The New York Times down to Domain Name Wire and VentureBeat, shows how closely the small-business web market watches the company that dominates domain registration.
First-order effects
- KKR and Silver Lake gain a defined path to liquidity on their 2011 investment, with underwriter interviews over the coming weeks determining which banks lead the offering.
- GoDaddy itself would move toward public-company discipline — quarterly disclosure of its registration, hosting, and site-building economics that have so far been private.
Second-order effects
- Rivals in domains and shared hosting would face a listed competitor whose valuation is set daily and whose stock could serve as acquisition currency for consolidation across hosting and web services.
- Investment banks competing for lead roles get a marquee consumer-web mandate at a time when tech issuance is the sector investors watch most closely.
Third-order effects
- If GoDaddy lists successfully, it strengthens the case that PE firms can exit mature internet-infrastructure assets through IPOs rather than strategic sales, encouraging similar hold-and-list strategies for other large registrars and hosting providers.
The trend: Private-equity-owned internet companies are increasingly choosing the public markets as their exit, converting dominant positions in unglamorous infrastructure like domains and hosting into listed growth stories.