AFCV buys Answers.com for $127M in cash

The publicly traded company still requires the approval of stockholders before it can close in Q2

Answers.com, a publicly traded company on NASDAQ, announced Thursday that it has agreed to be acquired by AFCV Holdings LLC, a Summit Partners portfolio company, for $127 million in cash.  AFCV will acquire all of Answers.com’s outstanding shares for $10.50 a piece, representing a 33% increase over its 90-day volume-weighted average closing stock price.  The pricetag that AFCV is offering is more than double the company’s initial pricing of $5 per share when it made its initial public offering in 2004.

Incorporated in 1998 (as GuruNet), the Israel-based Answers.com hosts a varied selection of Q&A forums on its website.  WikiAnswers allows users to pose questions to the community, and anyone can answer, edit, or chip in information, while ReferenceAnswers is a forum where questions are answered specifically by editors.  Video Answers maintains a library of some 200,000 videos in more than 200 categories, allowing users to browse through demonstrations and get answers to how-to questions.

As of November 2009, the company had 50 million unique monthly visitors in the U.S., making it one of the top 20 Web properties in the country, while it saw 75 million unique monthlies worldwide, placing it within the top 30 Web properties in the world. The website supports six different languages, including English, French, Italian, German, Spanish, and Tagalog.

The Answers.com board of directors unanimously voted to approve the merger and encourages stockholders to approve as well.  After the mailing of the proxy statement to shareholders, a meeting will be held where shareholders can consider the merger and vote.

"This is a great outcome for our shareholders,” said Bob Rosenschein, Founder, Chairman and CEO. “After an exciting six years as a public company, we are very pleased to achieve considerable value for our investors.”

If shareholders agree to the acquisition and it receives regulatory clearance, the merger is expected to close by the second quarter of 2011.  UBS Investment Bank is acting as financial advisor and Kramer, Levin, Naftalis & Frankel, LLC is acting as legal advisor to Answers.com. 

Summit Partners is a growth equity investor and AFCV Holdings was created in 2007 to build and acquire a broad range of Internet technologies and businesses.

Image source: Answers.com