H&F strikes $640m online media deal

The firm's sixth fund has agreed deals worth nearly $2bn this month.

Hellman & Friedman has inked a $640 million take-private for Internet Brands, an online media company that owns and operates more than 100 websites including vacationhomes.com and carsdirect.com.

Internet Brands stockholders will receive $13.35 in cash for each outstanding share of common stock in the company, which represents roughly a 46 percent premium of the closing price on 17 September. The transaction is expected to close in fourth quarter of 2010, according to a statement.

An undislcosed amount of debt financing for the deal is being provided by Bank of America, BMO Capital Markets, GE Capital and RBC Capital Markets. Simpson Thacher & Bartlett is advising Hellman.

Earlier this month, Hellman announced a $1.3 billion deal to buy Associated Materials, a manufacturer of exterior residential building products.

The firm is investing from its sixth fund, which closed on $8.4billion in 2007. Its seventh fund closed on $8.8 billion in October 2009, but has yet to be activated, as Fund VI is still in the process of making investments. A firm spokesperson declined to say how much dry powder Hellman has left in its sixth fund. One LP source estimated the firm may continue to draw from Fund VI well into 2011.

Hellman’s success in raising Fund VII was touted as one of the few signs of life in the private equity fundraising market in 2009. The fund got re-ups from about 75 percent of existing investors. Fund VII also included a “substantial” amount of LPs from Europe.

Hellman is just one of the many funds in the private equity universe that have collectively raised about $1.2 trillion since 2005. Hellman’s fund is part of an estimated $420 billion capital overhang in the private equity market that some investors believe put upward pressure on pricing as GPs scramble to put their capital to work.

Another firm, The Blackstone Group, expects to close its sixth fund on $13.5 billion soon, but has about $5 billion left to deploy from Fund V.