Private equity group Permira has agreed to purchase genealogy website Ancestry.com, it was announced Monday.
Permira will pay $32 a share, making the purchase worth $1.6 billion. As part of the terms of the deal, Tim Sullivan, Ancestry.com's President and Chief Executive Officer, and Howard Hochhauser, Ancestry.com's Chief Financial Officer and Chief Operating Officer, will maintain a majority of their equity stakes in the company. Spectrum Equity, which owns approximately 30% of the company's outstanding shares, will also remain an investor in the company.
The deal represents a premium of 41% over the company’s stock price on June 5, the last day prior to press reports that the company had hired a financial advisor to consider a potential sale of the company. Spectrum Equity has agreed to vote in favor of the sale.
Ancestry and Permira say that the purchase will not affect Ancestry’s growth strategy, and that it will continue to execute initatives led by content acquisition and investment in technology, now with funds provided by Permira. Nor will it alter Ancestry’s operating structure. Ancestry will also continue to operate in Utah.
While the deal still requires the approval of the holders of a majority of Ancestry.com’s outstanding shares, the deal is expected to close in early 2013.
"This is a successful outcome for our public stockholders, and a great day for Ancestry.com employees and subscribers around the world," said Sullivan said in a statement.
"We're excited that Permira shares our commitment to keep investing in our technology and product experience to make family history easy and accessible for more and more families around the world. Their strong investment track record in the technology and Internet sectors makes them a terrific advisor and partner as we take the company forward."
"With its pioneering technology and market leading position, Ancestry.com is an exciting investment opportunity for the Permira funds. We are thrilled to be able to back the company as it continues to develop new and innovative content, and expand in both its core markets and into new geographies," Brian Ruder, Partner and Head of Permira's Menlo Park office, said in a statement.
"We look forward to bringing Permira's technology and media experience to bear in supporting Tim, Howard and the rest of the talented team at Ancestry.com and its mission of helping everyone discover, preserve and share their family history."
Launched in 1997, Provo, Utah-based Ancestry.com has over 2 million subscribers who pay to access over 10 billion digitized, indexed records. Over 39 million family trees, containing approximately 4 billion profiles, have been created on the site.
Ancestry, which filed for a $75 million IPO in 2009, purchased photo digitizing startup 1000memories earlier this month. In April, the company acquired Archives.com, a publicly-traded genealogy company, for $100 million.
London-based Permira is a European private equity firm. Founded in 1985, the firm advises funds with a total committed capital of approximately $26 billion.
Ancestry.com stock is currently trading at $29.18 a share.
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