Vector ‘registers’ a solid exit

Contact: Brenon Daly

A half-decade after taking private, Vector Capital announced the sale of the website registration and design provider to Group for $135m. That’s a fair bit lower than the $200m the buyout shop paid for the equity of in the LBO, but a fair bit above the company’s net cost of about $90m. (Profitable and debt-free held about $55m in cash and another $55m in short-term investments when it was taken private.)

As for the return, we understand that between two dividends, a divestiture and now the sale of the business, Vector realized about 2.5 times its original $60m equity investment on What’s interesting about the return is that Vector is making money on its holding even though actually shrank in the time it was owned by the buyout shop. Consider it a case of quality over quantity.

When it went private, was clipping along at a rate of about $25m per quarter. According to, that level has now dipped to $20m per quarter. (That may or may not be a sandbagged projection from the acquirer.) Part of the revenue decrease can be attributed to the fact that shed the corporate domain management business, which was doing just shy of $8m each quarter in business. So, on an absolute basis, the property is smaller, but on a comparable basis, the business grew on the top line.

Far more important than revenue growth is the fact that became far more profitable as a private company. (Some cuts appear pretty obvious to us: In the period before it went private, was spending about one-third of its revenue on sales and marketing.) On the conference call discussing the deal, indicated was running at a mid-to-high 20% ‘adjusted EBITDA’ margin. That’s a pretty rich level. In fact, it’s about 10 percentage points higher than’s own ‘adjusted EBITDA ‘ margins.