Hellman & Friedman to make nearly 2x with Internet Brands sale

​Hellman & Friedman, which has been expected to begin marketing its latest pool, will nearly double its money with the sale of Internet Brands, peHUB has learned.

Kohlberg Kravis Roberts & Co on Tuesday agreed to buy Internet Brands from Hellman & Friedman and JMI Equity. Financial terms weren’t announced but sister news service Reuters pegged the deal at $1.1 billion. KKR is making the investment through its flagship $9 billion North America XI private equity fund.

The buyout shops, along with CEO Bob Briscoclosed their $640 million buy of Internet Brands in December 2010. Hellman & Friedman, JMI and Brisco invested $475 million of equity, according to SEC filings from that time. Most of the $475 million came from Hellman & Friedman, the filings show. Brisco contributed $12.2 million while JMI put in $20 million. The rest came from Hellman & Friedman, which owned 93.2 percent of Internet Brands after the sale.

Hellman & Friedman stands to make nearly twice its investment with the sale of Internet Brands to KKR, peHUB learned. El Segundo, Calif.-based Internet Brands owns more than 135 major websites, including CarsDirect.com and ApartmentRatings.com, across seven consumer verticals. Revenue in 2012 was $154 million, Moody’s Investors Service said.

The investors got some of their money back in February 2013 when Internet Brands issued $380 million of new debt. Part of the proceeds was used to fund a $127 million dividend to Hellman & Friedman, Moody’s said.

Hellman & Friedman was expected to begin gathering capital for its next pool in May, Bloomberg News reported. It is unclear if the San Francisco buyout shop has started.

Hellman & Friedman, which invests in various industries including insurance, software and industrial, has been exiting deals. The firm inked a $2.35 billion sale of Sheridan Healthcare to AMSURG last week. In March, Hellman & Friedman, along with Stone Point Capitalalso sold Sedgwick Claims Management Services to KKR for $2.4 billion.

Hellman & Friedman Capital Partners VIII is expected to seek $8.9 billion for Fund VIII, Buyouts said. The amount is nearly the same as that raised by Hellman & Friedman Capital Partners VII, which closed at $8.8 billion in 2009. The seventh fund was producing a net IRR of 2.8 percent as of Sept. 30, according to California Public Employees’ Retirement System performance data.

Officials for Hellman & Friedman declined comment.

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