With Google’s Buy of Zagat, Kleiner Perkins and GA Cash Out After a Decade–UPDATED

What a difference three years make.

Today, Google announced it has acquired Zagat Survey. While financial terms weren’t disclosed, this would be a major win for Tim and Nina Zagat, who started the company in 1979 as a list of New York restaurant reviews compiled by friends.

The sale is the second time the founders have tried to offload the company. In 2008, the “Burgundy Bible” went up for sale and was seeking bids of 20X EBITDA or $200 million. Goldman Sachs was the adviser for the 2008 process.

Zagat, in 2008, was producing around $5 million in cash flow. Several PE firms looked at Zagat but balked at the high price tag, I’m told.

Zagat was worth about $50 million to $100 million in 2008, a banker tells peHUB today. “If Google is the buyer they may be getting their price of close to $200 million,” a banking source says.

UPDATE: TechCrunch, late Thursday, said Google bought Zagat for less than $66 million. The story did not identify the source (or any source). But that price seems mighty low, my source says.

Zagat’s investors likely put in about $35 million to $40 million, the person says. “Unless it was a distress sale – meaning Zagat was losing money and I don’t think Google buys those kind of companies– I can’t imagine it sold for less than $100 million,” the source says.

The acquisition of New York-based Zagat is seen as a way for Google to bridge the gap between Google Places and Yelp.

The deal also provides a way for some big name investors to cash out. In 2000, Zagat sold a third of the business to an investor group led by General Atlantic Partners for $31 million. Other investors include Kleiner Perkins Caufield & Byers and Allen & Company.

This time around, Zagat was advised by Peter J. Solomon, the founder and chairman of the IB that bears his name. Allen & Co. also advised, a different source says.

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