Go Daddy 2015 Annual Report Download - page 92

Table of Contents
GoDaddy Inc.
Notes to Consolidated Financial Statements
(In millions, except share amounts which are reflected in thousands and per share amounts)
1. Organization and Background
Description of Business
We are a leading technology provider to small businesses, web design professionals and individuals, delivering simple, easy-to-use cloud-based products and
outcome-driven, personalized customer care. We operate the world’s largest domain marketplace and provide website building, hosting and security tools to help
customers easily construct and protect their online presence and tackle the rapidly-changing technology landscape. As our customers grow, we provide applications
helping them connect to their customers, manage and grow their businesses and get found online.
Organization and Initial Public Offering
We were incorporated on May 28, 2014 for the purpose of facilitating an initial public offering (IPO) and other related transactions in order to operate the
business of Desert Newco, LLC (Desert Newco) and its subsidiaries.
On April 7, 2015 , we completed our IPO and sold 26,000 shares of Class A common stock at a public offering price of $20.00 per share, including 2,500
shares purchased by affiliates of certain members of our board of directors (the Board). We received $491.8 million in proceeds, net of underwriting discounts and
commissions, which we used to purchase newly-issued limited liability company units (LLC Units) from Desert Newco at a price per unit equal to the IPO price.
In connection with the IPO, we completed a series of organizational transactions on April 7, 2015 (the Reorganization Transactions), including:
• the amendment and restatement of Desert Newco’s limited liability company agreement (the New LLC Agreement) to, among other things, appoint us as
sole managing member and reclassify all LLC Units as non-voting units;
• the issuance of shares of Class B common stock to each of Desert Newco’s pre-IPO owners (the Continuing LLC Owners) on a one-to-one basis with the
number of LLC Units owned; and
• the acquisition, by merger, of four members of Desert Newco (the Reorganization Parties), for which we issued 38,826 shares of Class A common stock
as consideration (the Investor Corp Mergers).
We are the sole managing member of Desert Newco. Although we have a minority economic interest, we have sole voting power in, and control the
management of, Desert Newco. As a result, we consolidate Desert Newco's financial results and report a non-controlling interest related to the portion of Desert
Newco not owned by us. As of December 31, 2015 , we owned approximately 43% of Desert Newco.
The Reorganization Transactions were considered transactions between entities under common control. As a result, the financial statements for periods prior
to the IPO and the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes.
On December 16, 2011 , investment funds managed by Kohlberg Kravis Roberts & Co. L.P. (KKR), Silver Lake Partners (Silver Lake) and Technology
Crossover Ventures (TCV, and collectively with KKR and Silver Lake, the Sponsors) along with other investors purchased a controlling interest in Desert Newco
from YAM Special Holdings, Inc., formerly known as The Go Daddy Group, Inc. (Holdings), an entity owned by Robert R. Parsons (Bob Parsons), Desert
Newco’s founder and a member of our board of directors, in a transaction we refer to as the Merger. As a result of the Merger, we applied purchase accounting and
a new basis of accounting beginning on December 17, 2011 .
Basis of Presentation
Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP), and
include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.
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