Reuters: Ancestry.com to be acquired by Permira-led group for $1.6 billion

(Reuters) – U.S. genealogy website operator Ancestry.com agreed to be acquired by a group led by private equity firm Permira in a $1.6 billion deal, four months after it put itself up for sale following the cancellation of a TV show based on its research.

The company, whose website helps users trace their family roots, will be taken private at $32 per share, a 10 percent premium to the stock’s Friday closing price of $29.18.

Shares of the company rose to $31.49 in early trading on the Nasdaq on Monday. They have risen 17 percent since June 5, when the company said it is exploring a sale.

The company, which sponsored the U.S. version of the popular British series “Who Do You Think You Are?,” suffered a blow in May when NBC decided not to renew the show for a fourth season.

The show, built around tracing celebrities’ family histories through Ancestry.com’s databases, was a major driver of new subscriber additions for the website.

Ancestry.com, which went public in 2009, has about 2 million paid subscribers.

The Provo, Utah-based company put itself up for sale in June and hired Frank Quattrone’s Qatalyst Partners to find buyers.

Ancestry.com received offers in August from three private equity firms, including Permira, but none of the bidders met the company’s price expectations at the time.

Sources told Reuters earlier this month that Permira had emerged as the front-runner to buy the company.

INSIDER SUPPORT

The Permira-led buyout group includes the private equity firm’s co-investors, members of Ancestry.com’s management, including Chief Executive Tim Sullivan and Chief Financial Officer Howard Hochhauser, and Spectrum Equity, which owns about 30 percent of Ancestry.com.

Spectrum Equity declined to comment on the deal.

Sullivan held a 5.2 percent stake, according to an April 11 regulatory filing.

Barclays, Credit Suisse Securities, Deutsche Bank, Morgan Stanley and RBC Capital Markets have agreed to provide financing for the deal, Ancestry.com said.

The deal is Permira’s fourth in the United States in 12 months after Renaissance Learning, Intelligrated and Genesys.

Photo courtesy of Shutterstock

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