Web Hosting Company being sold for $2.25 billion – 07/02/2011

The Go Daddy Web Hosting company, the controversial giant of Internet address registration companies, said Friday that it would sell itself to a group led by Kohlberg Kravis Roberts and Silver Lake.

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While the company did not disclose the financial terms of the deal, the buyers are paying about $2.25 billion, according to people briefed on the matter.

In Go Daddy, the investor group – which also includes Technology Crossover Ventures as a minority partner – will buy the biggest domain name registrar in the world. The company manages more than 48 million domain names and has nearly 9.4 million customers.

When Go Daddy sought to go public in 2006, the company reported $139.8 million in revenue and conceded that it had consecutive annual losses. Since then, however, it has built up its business significantly: It reported $1.1 billion in sales for its most recent fiscal year.

The company’s board hired Qatalyst Partners, the investment bank founded by Frank Quattrone, last fall to explore a potential sale after having been approached by both corporate suitors and leveraged buyout firms.

Silver Lake, which has offices in New York and Menlo Park, focuses on technology investments, and led the 2009 buyout of Skype from eBay Inc. KKR, the firm run by Henry Kravis and George Roberts, buys companies across industries.