When Bankrate (Nasdaq: RATE) got taken private two years ago, no one was more bummed than I. For months, I'd backed the stock as a great way to play consumers' desire for independent personal finance info, a trend that helped make Morningstar (Nasdaq: MORN) a star, gave rise to Jim Cramer and TheStreet.com (NYSE: TST), and even fueled The Motley Fool's fires.

As evidence of the company's popularity, in 2009, the year of its takeover, Bankrate generated $37 million worth of free cash flow from its business of distributing credit card offers, mortgage rates, and other financial data on its site. At the $571 million takeout price, the company's private equity buyers got themselves a sweetheart deal, paying just 15.4 times FCF to own one of the best pieces of real estate on the Web.

Friday, they sold it back to us, reIPO'ing Bankrate at $15 a share. I probably should be cheering at getting a second chance to own it -- but I'm not.

Why not? Because today's Bankrate is barely a shadow of its former self. Two years after private equity took Bankrate in-house to "improve" the business, Bankrate's now generating just $8 million in annual free cash flow. Its market cap, according to Capital IQ, looks bloated at $1.5 billion. Worst of all, this formerly cash-rich company returns to us laden with nearly $300 million in long-term debt, $117 million of which is to be retired with proceeds from the re-IPO. I fear that so much debt will hamstring Bankrate's ability to compete effectively against much better funded rivals such as News Corp. (NYSE: NWSA) and Google (Nasdaq: GOOG).

Granted, management promises to produce pretty dramatic improvements in free cash flow "on a go-forward basis." If this happens, such free cash can be used to pay down the debt. For the time being, however, I'm looking at a stock that costs three times what it cost just two years ago, yet generates less free cash flow.  And no, I'm not impressed.

Editor's Note: A previous version of this article referenced $245 million in preferred equity, which is being converted to common stock in accordance with the IPO. The article has been updated to reflect IPO-related changes to the company’s debt condition and to offer management’s free cash flow outlook.

Fool contributor Rich Smith used to own Bankrate, and still owns Google. The Motley Fool owns shares of Google and Morningstar, and Motley Fool newsletter services have recommended buying shares of Google and Morningstar. The Motley Fool has a disclosure policy.

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