DealBook: Go Daddy to Sell Itself to K.K.R. and Silver Lake

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

While the company did not disclose 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 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.

Its business revolves around steady subscription fees for the registrar and Web hosting services, which are attractive to private equity firms.

But Go Daddy is perhaps best-known for its risqué advertising, including “too-hot-for-TV” Super Bowl commercials featuring scantily clad spokeswomen like the race car driver Danica Patrick and the celebrity trainer Jillian Michaels.

But the company’s most outspoken champion is its founder and chief executive, Robert Parsons. He will remain with the company, despite his occasional brushes with controversy, including his shooting an elephant in Zimbabwe.

Unlike most chief executives, Mr. Parsons puts a premium on speaking his mind. One of the reasons the company gave in 2006 for withdrawings its planned initial offering was Mr. Parsons’ chafing at the quiet-period rules mandated by the Securities and Exchange Commission.

And to this day, he maintains a personal video blog, where he posts video skits that address topics like cyberbullying and donating to Haitian charities.

The buyout firms have received financing commitments from their financial advisers, Barclays Capital, Deutsche Bank and RBC Capital Markets, as well as K.K.R.’s own capital markets arm.

Go Daddy is the latest technology leveraged buyout in which K.K.R. and Silver Lake have worked together. They were both part of the investors groups that acquired Sungard and Avago.

Only about half of the purchase price is in debt financing, according to the people briefed on the matter. That leaves the company with less debt than many private equity investments.

Go Daddy was advised by Qatalyst Partners, the investment bank run by Frank Quattrone.

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