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Endurance International Group goes public

Mon, 28th October 2013, 14:16

Endurance International Group (EIG), better known for its webhosting brands which include Domain.comiPageFatCow, Homestead, BluehostHostGatorA Small OrangeiPowerDotster, as well as a host of others is Massachusetts’ newest public company.  Endurance raised $252 million selling 21 million shares at $12, well below its target $14 to $16 price that the company had originally proposed. EIG goal was to raise $400 million in the IPO, and indeed, in its first full day of trading Friday the stock turned in a tepid performance closing Friday at $11.25 on the Nasdaq stock exchange.

Endurance revenues have grown from $87.8 million in 2010 to $292.2 million last year but the company has yet to earn a profit posting a $139.3 million loss last year.

The SEC filing does provides some interesting insights in the world of high finance webhosting firms. Recently Endurance International Group struck a deal to buy Mumbai-based Directi Web Technology Pvt for $110 million. According to the the SEC filing by Endurance, it entered into a master-share purchase agreement to acquire all of the outstanding capital stock of Directi Web Technology from Directi Technology Holdings Inc, for an amount estimated to be between $100 million and $110 million in cash or, at the election of the seller, a combination of cash and shares of its common stock, subject to conditions. Directi provides web presence solutions to SMBs in various countries, including India, the US, Turkey, China, Russia and Indonesia. The acquisition is expected to close during the fourth quarter of 2013.

Endurance has paid $5 million to Directi Holdings, which will be credited against the purchase price and will be refunded if the acquisition does not close for specified reasons. Under the agreement, Endurance will pay around half of the total price in cash at the closing of the acquisition (after factoring out the $5 million it paid initially). It will also issue a promissory note to Directi Holdings for the balance due with the note maturing on April 15, 2014. At maturity, it will be obligated to pay an amount equal to the greater of the original principal amount of the promissory note or the annualized revenues associated with the Directi business for specified periods.

About Endurance International Group

A leading provider of cloud-based solutions, Endurance helps small and medium-sized business owners establish, manage and grow their businesses by harnessing the power and promise of the web. Less than 20 years old, Endurance serves approximately 3.4 million subscribers through a family of brands that includes Bluehost, HostGator, Domain.com, FatCow, iPower and iPage. Endurance is headquartered in Burlington, Massachusetts, has a presence in Asia and the Americas, and employs approximately 2,500 people.

Endurance International brands also include: 

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