Cloud Provider Endurance Preps for an IPO

Endurance is one of the top hosting operators for small- and medium-sized businesses

   

Endurance International, which hosts websites and domains for small- and medium-sized businesses (SMBs), has filed for an IPO.

And in light of the strong overall performance of cloud deals, the Endurance IPO should see some quality traction.

Founded in 1997, Endurance International now boasts roughly 3.4 million subscribers across the world and provides a comprehensive suite of 150 products and services, including website design, email, e-commerce, storage, security, online marketing, mobile apps and productivity solutions.

Endurance touts its data-driven focus as a key to its success. The company constantly analyzes traffic and customer behavior so as to improve customer service, conversion ratios and retention rates.

Those efforts have translated nicely onto the income statement. During the past three years, Endurance International’s revenues have skyrocketed from $87.8 million to $292.2 million, representing a compounded annual growth rate of 82%. During this period, EBITDA went from $25.1 million to $132.8 million, illustrating healthy margins.

The market opportunity also remains fairly large. According to Access Markets International Partners, there are more than 76 millions SMBs worldwide — yet only about a quarter have websites. However, to remain competitive, many owners realize they need to make investments in new technologies. SMBs are forecast to spend $96 billion annually on cloud-based services by 2015, which comes to a CAGR of 28% from 2012.

In other words, Endurance’s growth story is likely to … well, endure.

The company also should get a boost from the general bullishness in cloud stocks, which includes IPOs like Rally Software (RALY) and Textura (TXTR) that have more than doubled. Hosting operators also have done well, as seen with Web.com’s (WWWW) 108% gain year-to-date.

Endurance International plans to list on the Nasdaq under the ticker “EIGI.” Lead underwriters include Goldman Sachs (GS), Credit Suisse (CS) and Morgan Stanley (MS).

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/cloud-provider-endurance-international-preps-for-an-ipo/.

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