* Offer of $32 per share represents a 10 pct premium to
* Buyout group includes CEO and CFO
* Shares rise 8 pct to $31.49
(Adds analyst's comment, details)
Oct 22 U.S. genealogy website operator
Ancestry.com agreed to be acquired for $1.6 billion by
a group led by Europe-based private equity firm Permira Advisors
LLC, 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 was looking for a buyer.
Being owned by private equity and having a much smaller base
of owners puts Ancestry.com in a better position to achieve
long-term growth, BMO Capital Markets U.S. analyst Edward
Williams said. "The reality of their business model is it allows
for excess volatility in shares," Williams said.
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 had hired Frank Quattrone's
Qatalyst Partners in June to find a buyer.
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 had told Reuters earlier this month that Permira had
emerged as the front-runner to buy the company.
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 is the
largest shareholder in the company with a 30 percent stake.
Spectrum will exchange $100 million worth Ancestry.com
shares for shares of the buying group -- Global Generations
International Inc and Global Generations Merger Sub -- the
company said in a filing.
Sullivan and Hochhauser will also exchange or roll over a
"substantial majority" of their stakes for equity securities in
the buying group.
Sullivan held a 5.2 percent stake, according to an April 11
Spectrum Equity declined to comment on the deal.
Barclays, Credit Suisse Securities, Deutsche Bank, Morgan
Stanley and RBC Capital Markets have agreed to provide financing
of up to $1.02 billion for the deal, Ancestry.com said.
The company will have to pay a termination fee of $37.8
million if it accepts another offer. If the buying group
terminates the agreement, it will have to pay Ancestry.com $75.6
The deal is Europe-based Permira's fourth in the United
States in 12 months. It previously acquired technology-based
student assessment firm Renaissance Learning, automated material
handling solutions provider Intelligrated, and software maker
(Reporting by Sruthi Ramakrishnan in Bangalore and Simon Meads
in London; Additional reporting by Siddharth Cavale; Editing by
Sriraj Kalluvila and Ted Kerr)