KKR Deal to Reglike: Bob Parsons Explains Go Daddy

Investment makes 36 millionaires, will help firm expand overseas and acquire complementary businesses.

I just got off the phone with GoDaddy.com founder Bob Parsons, who explained the deal his firm just struck with KKR, Silver Lake, and Technology Crossover Ventures.

Contrary to notes in publications such as The Wall Street Journal, this was not an outright buyout. Parsons remains the single largest shareholder in the firm in what he terms a “partnership”.

Ahead of the deal Parsons owned 78% of the firm and employees owned 22% through stock options.

Both Parsons and the employees benefited from the investment, with 36 employees getting $1 million plus checks.

All of the senior management invested in the deal and a number of people with options rolled some of it into stock in the firm.

Why not just sell the firm?

“I’m not dead yet, Andrew,” Parsons told me. “The reason I’m the single largest investor is since this is what I eat, sleep, and breathe.”

Parsons will remain with the firm as Executive Chairman of the Board and firm president Warren Adelman has been promoted to CEO.

“We cut a smokin’ deal with KKR, Silver Lake Partners, and Technology Crossover Ventures,” stated Parsons. But it isn’t just regarding the money, he stated. “What excites me is what they bring to us as a competitor.”

He explained that the investors’ experience in overseas markets and technology will help the firm grow. The firm may also make acquisitions, such as to help the firm offer a greater range of cloud based services.

“If I could pick three firms out of the blue [to partner with], these are the guys I’d pick,” he stated.

Parsons would not disclose the amount of investment, but when I asked him regarding notes of $2.25 billion he stated “it might be close”.