I was reading up a bit about the Go Daddy partnership and found something interesting on AZCentral.com. According to the article, after the deal is finalized, “Warren Adelman, Go Daddy’s chief operating officer, becomes CEO.” Bob Parsons, current GoDaddy CEO and founder will then be named as the executive chairman.

Warren Adelman is currently President and Chief Operating Officer of the company. Although he seems like more of a behind the scenes guy with Parsons taking center stage, Adelman appears to be an active customer advocate, at least in my experience. I’ve seen him give out his personal email address, and a good way to get results at the company has generally been to email/contact the office of the president.

A couple of months ago, I had a transfer issue and was having trouble getting it resolved. After speaking with a few people over a couple of days, I sent Adelman an email to see if he could help. Within a couple of hours, my issue was resolved. I don’t know if Adelman personally had anything to do with it, but I can only assume he was responsible for fixing the problem.

The AZCentral news article indicated that Parsons will remain active within the company, and I suspect that’s a big reason he maintains a majority stake in the company (may be the largest shareholder rather owning the majority of the company). He likely could have sold more of his position if he wanted to step aside. While an executive chairman role may sometimes be more ceremonial than day to day management, I would bet Parsons will remain at the forefront of the company, especially with regards to marketing and advertising.

It will be interesting to see how the company transforms without Parsons at the helm.

I just received a news release announcing that Go Daddy has entered a “partnership” with private equity companies, KKR, Silver Lake and TCV. The news comes amid speculation last week that KKR and/or Silver Lake were looking to acquire GoDaddy for somewhere between $1-2.5 billion. The financial terms of the agreement were not disclosed.

According to Go Daddy founder Bob Parsons,

“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. We believe, together, we will take the company to the next level, especially when it comes to accelerating international growth.”

For those who were concerned that a change in leadership could lead to big changes in the way Godaddy does business, it looks like your concerns may be allayed for the time being, as it does not look like Parsons is going anywhere. It appears that these three investors have experience with other tech related businesses, including Groupon, Zynga, Facebook, HomeAway, and others.

From my perspective, it looks like this could be a good opportunity for GoDaddy executives to take some cash out of their investments, as I would bet there are employees and executives who have company stock. In addition, this could be the beginning steps to an eventual IPO, as a number of the companies in which these PE firms are involved have gone public or have plans to go public.

Update: Wall St. Journal is reporting that its sources are saying the deal may be worth $2.25 billion

Update 2: Andrew Allemann had a conversation with Bob Parsons and he is reporting that the WSJ article about a sale is  erroneous, as Parsons remains the largest shareholder in the company.

Official Release:

The Go Daddy Group, Inc., the world’s largest provider of Web hosting, domain names and new SSL Security Certificates, announced it has signed a definitive agreement to receive a strategic investment and enter into a partnership with KKR, Silver Lake and Technology Crossover Ventures. Financial terms of the transaction were not disclosed.

Founded in 1997, Go Daddy is the world’s largest on-ramp for cloud-based software and services. The company serves more than 9.3 million global customers and manages more than 48 million domain names. Go Daddy has locations in Arizona, Colorado, Iowa, Washington, D.C., Singapore, Toronto and The Netherlands, and is headquartered in Scottsdale, Arizona.

Go Daddy’s track record of strong organic growth has been driven by its innovative products and differentiated customer service. The Company offers more than 50 product lines, including comprehensive hosting solutions, website creation services and building tools, secure SSL Certificates, personalized email with spam and anti-phishing filtering, e-commerce tools, online marketing solutions and more.

“I’ve always said we would make a move like this when the right deal with the right partners could help us do the right thing for our customers and our employees,” said Go Daddy CEO and Founder Bob Parsons. “This is it! 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. We believe, together, we will take the company to the next level, especially when it comes to accelerating international growth.”

Go Daddy is widely recognized for its industry leadership:
Ranked on the Inc. “500/5000” List of the nation’s fastest-growing privately-held companies for seven years, including 2009 and 2010;
Awarded “Innovator of the Year” by NetApp in 2011;
Ranked on the Deloitte “Technology Fast 500” List for six years, including 2009 and 2010.
Greg Mondre, Managing Director, of Silver Lake said: “Go Daddy is powerfully positioned for future growth as it continues to innovate and add to its truly unique platform of cloud-based software and services. At the same time, we plan to maintain and augment all of the attributes that have made Go Daddy a clear market leader today, including world class customer support and competitive pricing for its 9.3 million customers.”

“In Go Daddy, we are pleased to be partnering with a high-growth market leader and an outstanding team,” said Herald Chen, head of KKR’s software and Internet effort. “Building on Go Daddy’s exceptional customer service and loyal customer base, we believe there is significant opportunity to expand the current portfolio of products and services as well as accelerate growth internationally.”

Will Griffith, General Partner at TCV, which is also joining KKR and Silver Lake as an investor in Go Daddy, said: “For years, we have admired what Bob and the team have built with Go Daddy. We are excited to invest in the business and contribute to its continued success.”

The transaction is subject to customary closing conditions. Qatalyst Partners served as the exclusive advisor to Go Daddy in connection with the transaction. Barclays Capital, Deutsche Bank Securities, Inc. and RBC Capital Markets acted as financial advisors and, along with KKR Capital Markets, they or their affiliates provided financing commitments for the transaction.

About The Go Daddy Group, Inc.
Go Daddy is a leading provider of services that enable individuals and businesses to establish, maintain and evolve an online presence. Go Daddy provides a variety of domain name registration plans and website design and hosting packages, as well as a broad array of on-demand services. These include products such as SSL Certificates, Domains by Proxy private registration, ecommerce website hosting, blog templates and blog software, podcast packages and online photo hosting. The Go Daddy Group has more than 48 million domain names under management. Go Daddy registers, renews or transfers more than one domain name every second of every day. GoDaddy.com is the world’s largest Web hosting provider and is the world’s No. 1 domain name registrar according to Name Intelligence, Inc. In 2010, The Go Daddy Group registered more than one-third of all new domain names created in the top six generic top-level domains, or gTLDs, including .com, .net, .org, .info, .biz, and .mobi. For more information, visit www.GoDaddy.com.

About KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $61.0 billion in assets under management as of March 31, 2011. With 14 offices around the world KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. The KKR Technology Team has invested approximately $9 billion of capital in high quality technology companies globally. Current and previous technology investments include Amphenol, Aricent, Avago, Kodak, MMI, Northgate, NXP, RELTEC, SunGard, TASC, Tenovis, Unisteel, Visma, Wincor Nixdorf, and Yageo. KKR is publicly traded on the New York Stock Exchange (NYSE: KKR). For additional information and a complete list of KKR’s private equity investments, please visit KKR’s website at www.kkr.com.

About Silver Lake
Silver Lake is the global leader in private investments in technology and technology-enabled industries. Silver Lake invests with the strategic and operational insights of an experienced industry participant. The firm has over 90 investment professionals located in New York, Menlo Park, San Francisco, London, Hong Kong and Tokyo and manages over $14 billion across large cap and middle market private investment strategies as well as a credit investment strategy. The large cap Silver Lake Partners fund has made numerous investments in technology industry leaders such as Allyes, Ameritrade, Avago, Avaya, Business Objects, Flextronics, Gartner, Gerson Lehrman Group, Groupon, Instinet, Intelsat, Interactive Data Corporation, IPC Systems, MCI, Mercury Payment Systems, MultiPlan, the NASDAQ OMX Group, NetScout, NXP, Sabre, Seagate Technology, Serena Software, Skype, Spreadtrum, SunGard Data Systems, UGS, Vantage Data Centers, and Zynga. For more information, please visit www.silverlake.com.

About TCV
Technology Crossover Ventures (TCV), founded in 1995, is a leading provider of growth capital to technology companies, providing funds to later-stage private and public companies. With $7.7 billion in capital under management, TCV has made growth equity, PIPE and recapitalization investments in over 170 companies leading to 47 initial public offerings and more than 30 strategic sales or mergers. Representative investments include Altiris, C|NET, eHarmony, Expedia, Facebook, Fandango, Groupon, HomeAway, Liquidnet, Netflix, Orbitz, RealNetworks, Redback Networks, RiskMetrics Group, Solect Technology, TechTarget, TradingScreen, Travelport, Webroot and Zillow. TCV has 12 partners and is headquartered in Palo Alto, California with offices in New York, NY. For more information about TCV, visit www.tcv.com.