Breaking: Domain name company Donuts Inc. acquired by private equity firm Abry Partners

Breaking: Domain name company Donuts Inc. acquired by private equity firm Abry Partners

PE snaps up company that manages nearly 240 top level domain names.

Abry Partners, a private equity firm that has completed $77 billion in transactions since it was founded in 1989, is acquiring new top level domain name company Donuts, Inc. Terms of the deal and the expected closing date were not disclosed.

Donuts operates top level domain names such as .guru, .software and .life. It is the largest new top level domain name operator in terms of the number of TLDs managed with about 240 TLDs. About 4 million second-level domains using Donuts’ top level domains are registered.

The company also owns retail domain name registrar Name.com.

Donuts has raised more than $150 million from investors since it was founded in 2010 by domain industry veterans Paul Stahura, Jonathon Nevett, Richard Tindal, and Daniel Schindler. Paul Stahura was CEO until the beginning of 2017, when he became executive chairman and Bruce Jaffe took over as CEO. Since then Tindal and Schindler have left the company.

The company was one of the savviest applicants for new top level domain names. It understood early on that contention sets would likely be settled in private auctions, helping it refill its coffers by losing auctions for the new domains. Its scale has enabled it to operate profitably despite only modest demand for new TLD registrations.

The acquisition of the majority of shares in the company does not include an additional cash infusion into the company. The deal will allow some of the early investors to exit an investment they made eight years ago.

It’s not surprising that a private equity company would be interested in a business like Donuts. Donuts is essentially a subscription business with a very predictable annual renewal rate and cash flow.

 

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