This may be the end of the family tree for Ancestry.com (Nasdaq: ACOM) as a public company. The New York Times' DealBook reports that the leading genealogy website is in the final stages of a deal that will take the company private.
According to "people with knowledge of the matter," it's coming down to discussions with TPG Capital, Providence Equity Partners, and Permira. The final bids aren't due until early next month, but the chatter is that the buyout will be priced in the mid-to-upper $30s. This would cash out investors below the stock's all-time high of $45.79 set last year, though it would be a reasonable pop from Tuesday's close of $27.23.
Bloomberg was the first to report that Frank Quattrone's Qatalyst Partners was hired to identify potential suitors last month, and the new DealBook story confirms the chatter. An analyst told Bloomberg that Google (Nasdaq: GOOG) and Facebook (Nasdaq: FB) were logical buyers, but I disagreed. As I wrote at the time:
[W]hat would Ancestry.com add to Google or Facebook? Google would be more likely to blow up the premium model in favor of a more far-reaching, though potentially less lucrative, free ad-based genealogy solution. Facebook is also perpetually battling the silly rumor that it will begin to charge its more than 900 million active members to use the site. The last thing it needs is to add fuel to that nonsensical fire by buying a site where you have to pay to gain access to research tools. Private equity is what really makes sense.
Everything seems to be pointing to the private-equity route now.
The one thing working in Ancestry.com's favor is that it doesn't need a sugar daddy. Yes, things got rocky when Comcast's (Nasdaq: CMCSK) (Nasdaq: CMCSA) NBC Universal cancelled Who Do You Think You Are?, the Friday night show that starred Ancestry.com helping celebrities find their ancestors. However, growth concerns were eased when the site revealed that it had surpassed 2 million subscribers earlier this month.
Ancestry.com reports its latest quarterly results tomorrow, and that may help fine-tune the bidding process. Either way, it seems as if Ancestry.com's publicly traded lineage is coming to an end.
Keep digging?
Ancestry.com has been growing its offerings for international users, but it's not the best way to play growth overseas. A new report identifies three American companies set to dominate the world. It's free, but it won't be available forever. Check it out now.
