Permira to spend $1.6bn on Ancestry.com

The investment in the US-listed genealogy website means the firm’s €9.4bn fourth fund is now about 90% deployed.

UK-headquartered buyout firm Permira has agreed to buy Ancestry.com, a genealogy website listed on the Nasdaq stock exchange, for $1.6 billion, it said in a statement.

Permira has offered $32 per share – a 9.7 percent premium to Ancestry.com's closing price on Friday of $29.18, and a 41 percent premium to the closing price on 5 June 2012, the last trading day before news emerged that the company was considering a sale.

Ancestry.com is an online platform for family history research. The website holds 10 billion historical records and has approximately 2 million paying subscribers worldwide, according to the company’s website, mainly in English-speaking countries, but also in some countries in continental Europe. In 2011, the company’s revenues were $399.7 million.   

Permira plans to expand the geographical scope of the company, as well as improving the data technology.

“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, a partner at Permira, said in the statement. As part of the growth strategy, Permira will seek to do technology investments and content acquisitions.

We are thrilled to be able to back the company as it continues to develop new and innovative content

Brian Ruder

Tim Sullivan, Ancestry.com’s president and chief executive, and Howard Hochhauser, Ancestry.com’s chief financial officer and chief operating officer, will keep a majority of their equity stakes in the business as part of the deal. Spectrum Equity will also remain an investor. The deal needs to be approved by the majority holders of the outstanding shares of Ancestry.com and is expected to be completed in early 2013.

Barclays, Credit Suisse Securities, Deutsche Bank, RBC Capital Markets and Morgan Stanley have agreed to provide financing for the deal, with Morgan Stanley also acting as the financial advisor. Fried, Frank, Harris, Shriver & Jacobson and Clifford Chance acted as legal advisors.

The investment will be made from the firm’s €9.4 billion Permira Fund IV, a 2006 vintage, a source close to matter told Private Equity International. After this acquisition, Permira IV will be approximately 90 percent deployed. It is understood Permira will be doing one or two more investments from this fund.

The firm is currently raising its fifth fund, Permira V, which has a €6.5 billion target, according to PEI's in-house database PE Connect.