Endurance(EIG) Kicks Off $225 Million Credit Facility For HostGator

Corey

Thanks for pasting the article so those of us who don't have an account there can read it!

taipres

" Hello Fellow Gators,

There have been rumors flying around the web and the office about
HostGator being sold for many years now. I'd like to address these
rumors and put many of your fears to rest. I still own 100% of
HostGator and haven't collected a single penny towards any buyouts at
this time.

The latest rumor is the first that actually has some truth behind it.
I have indeed agreed to sell HostGator to Endurance International Group, which is why you're hearing stories
about EIG raising financing to purchase us. We are currently under
contract and if everything goes according to plan, EIG will be
purchasing HostGator in the next 3-4 weeks. This is the first time in
HostGator's history that we have ever reached an agreement on the
terms needed to complete a deal.

In the last few months, I've spent countless hours getting to know
EIG's CEO Hari Ravichandran, and I can honestly say that he is one of
the most trustworthy and knowledgeable people that I've ever met. In
other deals we've looked at, the potential buyers have only seen
HostGator as a slot machine and that's not true of Hari. He clearly
understands that HostGator is the 800 pound gorilla that it is today
thanks to all of you who provide the legendary support that HostGator is known
for.

It's only natural for all of you to be apprehensive towards change and
the fear of possibly losing your job. I can write whatever I want in order to
cover for EIG, but I would rather let the facts speak for themselves:

When I first heard about EIG purchasing Bluehost in November 2010, I
was extremely ecstatic. The first thoughts that came to mind were that
EIG was going to destroy the company, resulting in one of our biggest
competitors going the way of the dodo. However, rather than plunder
and pillage, they've hired and flourished. Bluehost was at 280
employees when the sale closed and they have 450 today. Their
management team has stayed the same and the culture has stayed the
same. Now, the Bluehost culture, employees, and philosophy have taken
hold to become the new status quo of EIG.

I'm confident the same will happen once again with the best of
HostGator culture, ideas, people, and leadership coming together at
EIG to create a more powerful hosting company than the world has ever
seen. In fact, I've heard that EIG with HostGator will be even bigger
than GoDaddy.

Once this deal is complete, I will continue to own all of the
HostGator occupied buildings through Oxley Leasing. EIG and I will
soon have a leasing deal in place that will not only include all of
the current occupied space leased, but will also expand Austin by
30,000 square feet as well as Houston by another 10,000-20,000 square
feet. Hari has also told me that one of his first acts of business
will be to do a major renovation of the Houston office. If EIG planned
on downsizing, they wouldn't be signing such huge expansions in both
Houston and Austin.

HostGator will be EIG's largest acquisition to date and with that it's
going to create countless opportunities for each and every person. Not
only at HostGator, but also at other EIG brands. I can't stress enough how
instrumental it will be for EIG to replicate HostGator's strengths
across all of their brands, and to do that, they will need HostGator
leaders and know how.

There are many of you who are going to call me crazy for deciding to
sell during a time in which HostGator has experienced unprecedented
growth and success. I'll do my best below to share a few of the many
reasons behind my decision:

* I want to travel the world before my wife and I have kids.
* I've been doing HostGator since I was 18, and I'm looking for a new
challenge.
* I'm extremely worried about the financial path our country is headed down.
* Taxes will be going up significantly in 2013, making it more
difficult for business owners.
* I've failed more times than I can count to launch software that
would allow us to compete as a registrar.
* We have tried and failed to develop a billing system that has
automated and can integrate with our key systems such as chat, phone,
affiliates, and tickets. I think we are finally on the right track,
but unfortunately I no longer have the patience to wait for it to all
come together. Thankfully EIG has tackled a lot of these challenges
already.
* I have practically 100% of my chips in HostGator and if something
should ever happen to the company, I'd more than likely be bankrupt in
a matter of a few months.

I could stick with HostGator for a few more years and turn it into a
multi-billion dollar business, but I think now is the right time for
me to move on and to let the company continue to grow and succeed
under EIG.

If any of you have any questions, feel free to email me at
[email protected] and I'll do my best to get them answered. The key
thing to remember is that this deal isn't complete yet, and if and
when it completes, Adam Farrar and the rest of management won't be
going anywhere.


Sincerely,

Brent Oxley

"

Amitz

http://pastebin.com/SvqzuMd8

Well, pastebin... Believe it or not.

taipres

@Jack said: I wonder if the CEO got scared about WHMCS taking them to court and decided to sell up or something?

Why would they take them to court? i'm sure lot of WHMCS's business has come from HostGator

ElliotJ

@Jack said: I wonder if the CEO got scared about WHMCS taking them to court and decided to sell up or something?

Probably not; I'm sure there's a good old 'it's not our fault if things go belly up' clause somewhere to protect them.

I'm guessing $225,000,000 quite simply sounds like a nice paycheck.

taipres

The Hostgator CEO mentioning the tax hike in 2013 is disturbing Hopefully the gov puts the brakes on that, ugh.

raindog308

Man, what weird reasoning.

I want to travel the world before my wife and I have kids.
I've been doing HostGator since I was 18, and I'm looking for a new
challenge.

OK, I can see these, though that second one is nonsense given the rest of his list.

I'm extremely worried about the financial path our country is headed down.

What? You are worried now but weren't at any time in the last 10 years?

Taxes will be going up significantly in 2013, making it more
difficult for business owners.

Yeah, I know, virtually all business in the U.S. will be closing shop and...oh wait. I hate taxes but saying "and therefore I have to sell my business" is nonsense.

I've failed more times than I can count to launch software that
would allow us to compete as a registrar.

What?!? Registrar "software" is not hard. It does take some work to write, sure, but it's not like you're building a new phone OS from scratch or something. How could he have failed multiple times?

We have tried and failed to develop a billing system that has
automated and can integrate with our key systems such as chat, phone,
affiliates, and tickets. I think we are finally on the right track,
but unfortunately I no longer have the patience to wait for it to all
come together. Thankfully EIG has tackled a lot of these challenges
already.

This is hardly necessary, nor is it an all-or-nothing effort. He could certainly work towards this goal and the fact that his IM is not integrated with his ticket system is a weird reason to sell.

I have practically 100% of my chips in HostGator and if something
should ever happen to the company, I'd more than likely be bankrupt in
a matter of a few months.

In other words, someone waived a lot of cash at him and he decided to take it. I have no problem with that...but the rest of his reasons are weird.

FRCorey

I have not heard of any taxes going up in 2013, this is pure bull IMO.

netomx

@FRCorey said: I have not heard of any taxes going up in 2013, this is pure bull IMO.

there's always taxes increasing, what's new with that?

taipres

@FRCorey said: I have not heard of any taxes going up in 2013, this is pure bull IMO.

not according to http://www.conservativedailynews.com/2012/05/the-2013-tax-increase-obama-pledged-would-never-happen/

Corey

His reasons sound immature except for the first one. BUT SO WHAT? It's his company let him be! If people leave hostgator then that's more customers for the rest of us

FRCorey

@Corey said: His reasons sound immature except for the first one.

I agree as well. He makes it sound like he does not pay himself. I bet he accepted because the WHMCS fiasco scared the shit out of him. I'm sure losing such a high profile customer is not going to be cheap in the long run.

Corey

@FRCorey or that didn't matter at all, and the paycheck sounded REALLY nice. He can retire and do nothing for the rest of his life on that money.

miTgiB

@Corey said: He can retire and do nothing for the rest of his life on that money.

That's true, but would you? I know I wouldn't, I'd go insane with nothing to do. At the height of the 1st dot-com bubble I was offered $22 million which I turned down like a fool, I felt the $3 million a year I was taking in would never end. It ended alright, and quicker than I ever imagined, and walked away from a pile of nothing. He took a big pile of money, he can do whatever he and his wife love and not worry about money ever again. Me, I just go to work each morning cuz nobody is going to come offer me a pile of money again, but I won't be stupid the next time if that ever happens.

Taz

@miTgiB
A bit history please.

miTgiB

@NinjaHawk said: A bit history please.

I opened the 3rd dialup ISP in St Louis in 1994, grew to about 17k clients, serviced St Louis, Chicago, Indianapolis and many rural areas in between

Corey

@miTgiB I would find something to do - and keep enough aside to live on for the rest of my life.

Taz

@miTgiB so what happened after that?

miTgiB

@NinjaHawk said: what happened after that?

It's not obvious? I started Hostigation

Taz

Well just wanted to know.

raindog308

@miTgiB said: That's true, but would you?

Yes. I would still get up at 5am and work all day long, but it would be on the million other things I enjoy.

Maounique

22 mil in 2000 were more than 22 mil today.
And I think tax increases are inevitable.
I am leaning right in my economical thinking, however, in a crisis you have to go left. Minimal income will do much more to the economy than any hundreds of billions in bail-outs and will also cost less.
The poor ppl are likely to spend the money and encourage agriculture, basic services, basic goods producing. The latter encourages the chinese, but who's to blame for that ? The tax breaks for big corporations that produce in china, for example. The loopholes in the tax system that allows to move profits elsewhere.
Higher taxation wont chase businesses out, at least not the small ones that should make the base of the free economy, and the big ones will be less likely to buy the small ones as taxation should be higher for the bigger corporations.
As it is now, they have a free lunch, almost no taxes and they can buy any politician to pass their "IP rights" crap.
It is a crisis of the system, I am not saying we should dust off keynes, but at least apply some of the no-nonsense clear-cut policies. if the gov't needs to help the economy, should help the ppl and small companies, not the fat cats, those will simply buy more yachts and BMWs, wont help the economy and the ppl a bit.
M

klikli

@taipres said: he is one of the most trustworthy and knowledgeable people that I've ever met

This is one of the most trusted single sentence I've ever heard.

miTgiB

@liam said: does that mean you had/have a nice bank balance?

Had is the key word. I basically lost everything I had in my 2nd divorce. I had spent most of the money on rental property to try to build income, I had a dozen houses and a piece of commercial property, 1 of the houses and the commercial property were very profitable and made the break even state of the others possible, but the judge saw fit to give those two properties to my ex, and leave me with the rest, which I could not afford to keep as the cost to keep them maintained out weighted their income. At one point I just said the hell with everything and hopped on a plane to South Carolina and started over. I took my last ounce of gold and pawned it off for $600 to buy the parts to build my first server for Hostigation in 2006 and here I am.

taipres

@miTgiB said: Had is the key word. I basically lost everything I had in my 2nd divorce. I had spent most of the money on rental property to try to build income, I had a dozen houses and a piece of commercial property, 1 of the houses and the commercial property were very profitable and made the break even state of the others possible, but the judge saw fit to give those two properties to my ex, and leave me with the rest, which I could not afford to keep as the cost to keep them maintained out weighted their income. At one point I just said the hell with everything and hopped on a plane to South Carolina and started over. I took my last ounce of gold and pawned it off for $600 to buy the parts to build my first server for Hostigation in 2006 and here I am.

so you were a millionaire at one point? Also sorry to hear about the divorce, hope you find a new wife(if you haven't already) and this one lasts.

miTgiB

@taipres said: hope you find a new wife(if you haven't already)

I really have no interest in getting married again, I'm 48, if the opportunity were there I might consider it, as I'm not young and dumb anymore that I would say never, but ya, not on my list of things to do again.