Endurance, the company that operates web hosting brands such as Bluehost, HostGator, Domain.com and others, has been acquired by Clearlake Capital Group. Clearlake will acquire all of the outstanding common shares of Endurance for $9.50 per share in cash. The transaction is valued at approximately $3.0 billion including outstanding indebtedness.
Headquartered in Burlington, Massachusetts, Endurance employs approximately 3,800 people across the United States, Brazil, India and the Netherlands.
The purchase price represents a 79% premium over Endurance’s unaffected share price of $5.30 as of September 25, 2020, the last trading day prior to media speculation about a potential transaction, and a 64% premium to its closing share price on October 30, 2020 of $5.81.
“We are pleased with this agreement which recognizes the value of our multi-brand scale platform,” said Jeff Fox, President and CEO of Endurance. “We are proud to serve approximately 5 million customers worldwide as a provider of solutions that help small and medium businesses succeed online and enhance the value of their customer relationships.”
The proposed transaction is expected to close in the first quarter of 2021 and is subject to approval by Endurance shareholders, along with the satisfaction of customary closing conditions including antitrust regulatory clearance
Clearlake’s O.P.S. Framework
Clearlake will finance the transaction with a combination of committed equity financing from the Clearlake funds and has secured committed debt financing for the proposed transaction, which is not subject to any financing condition. Upon completion of the acquisition, Endurance will become a wholly owned affiliate of Clearlake.
“The Endurance family of brands has built a leading position in the large and growing cloud hosting, domain, and digital marketing software space,” said Behdad Eghbali, co-founder and Managing Partner, and James Pade, Partner at Clearlake. “We look forward to partnering with this talented team and supporting its long-term strategic plan to drive growth through its focus on customer value. We are excited to leverage Clearlake’s O.P.S. framework to help the company fuel growth both organically and through acquisitions.”
Q3 Revenue: $278.4 Million
Endurance’s revenue for the third quarter of 2020 was $278.4 million, an increase of 3 percent compared to revenue of $270.4 million in the third quarter of 2019. Net income for the third quarter of 2020 was $6.7 million, compared to net income of $7.8 million for the third quarter of 2019.
Total subscribers on Endurance’s overall platform at September 30, 2020 were approximately 4.965 million, compared to approximately 4.780 million subscribers at September 30, 2019 and approximately 4.766 million subscribers at December 31, 2019. Average revenue per subscriber, or ARPS, for the third quarter of 2020 was $18.86, compared to $19.35 for the third quarter 2019 and $19.34 for the fourth quarter of 2019.
Founded in 2006, Clearlake is an investment firm with currently approximately $25 billion of assets under management. Clearlake seeks to partner with management teams by providing patient, long-term capital to dynamic businesses that can “benefit” from Clearlake’s operational improvement approach, called O.P.S. The firm’s core target sectors include technology, industrials and consumer.