Permira Agrees to Buy for About $1.6 Billion

Permira Agrees to Acquire for About $1.6 Billion was founded in 1983 as a publisher of genealogical books and magazines, and later digitized its content. Photographer: Jason Alden/Bloomberg

Permira Advisers LLP agreed to buy Inc. in a transaction valued at about $1.6 billion, gaining the world’s largest family-history website.

Permira, a London-based private-equity firm, will pay $32 a share, the companies said today in a statement. The price is 41 percent higher than’s closing price on June 5, the last day of trading before Bloomberg reported that the company had hired a financial adviser for a possible sale. worked with Frank Quattrone’s Qatalyst Partners LLC to find buyers and weighed a sale to various private-equity firms, people with knowledge of the matter have said. The company, which recently passed the 2 million-user milestone, sought a deal amid concerns that the cancellation of a television show featuring its research would crimp subscriber growth. The move dragged on shares earlier this year.

“It’s a reasonably attractive price, especially given the volatility around the stock,” said Edward Williams, a New York-based analyst for BMO Capital Markets. “The business model lends itself to being privately owned. They have a very strong cash flow -- a very predictable cash-flow business -- and I think that the reason to go private, generally, is that the public market is not valuing you appropriately.” gained 8 percent to $31.51 at the close in New York. Through Oct. 19, the stock had risen 27 percent this year.

Expansion Opportunities

Forgoing the constraints of being a publicly traded company could give more leeway to invest in expansion, such as Europe, Williams said. vies there with MyHeritage Ltd. has made some acquisitions, including for $100 million, a deal that closed in August. It also purchased San Francisco-based 1000memories Inc. this month for an undisclosed price.

“It is sometimes difficult for public investors, who may not have the time to really get in and understand the size of the market, to get comfortable with some of those investments,” Tim Sullivan,’s chief executive officer, said in a telephone interview. “Permira is perfectly aligned with our thinking.”

Sullivan said that he anticipates “absolutely no” employee dismissals as a result of the deal and that he will continue running the company with the same executives while seeking additional talent within the technology industry.

DNA Testing

As well as expansion in Europe, the company sees opportunities to continue investing in research for DNA testing, Sullivan said.

Sullivan and Howard Hochhauser, finance chief, will retain a majority of their equity stakes. The transaction, subject to shareholder and regulatory approval, is expected to close in early 2013.

Provo, Utah-based reported second-quarter sales and profit in July that topped analysts’ estimates, helped by user gains and demand for new products. also raised its sales forecast for 2012 to as much as $480 million. lost almost a third of its market value earlier this year amid concern that the cancellation of the TV show “Who Do You Think You Are?” would hinder expansion. The show, which had celebrities such as Martin Sheen and Marisa Tomei exploring their roots with the help of research, aired its final episode on May 18 on Comcast Corp.’s NBC network.

Breakup Fees would have to pay $37.8 million if it were to terminate to accept a superior proposal, the companies said in a regulatory filing. Permira would have to pay a $75.6 million breakup fee, the filing said. is unlikely to receive a higher bid, given how long it has already sought a buyer, Williams said. was founded in 1983 as a publisher of genealogical books and magazines, and later digitized its content.

Permira, started in 1985, advises funds with committed capital totaling about $26 billion. Since 1997, more than 30 percent of investments have been in technology, media and telecommunications companies, according to the statement.