Tuesday, May 26, 2015

Owners of Ancestry.com Hoping to Sell

Stock image of a rubber auction mallet hitting a stack of money
Image credit: Keerati / FreeDigitalPhotos.net
It seems Ancestry.com will soon be on the auction block, according to “people familiar with the matter.” Reuters broke the story last Wednesday, citing sources that did not wish to be identified. Ancestry’s owner, Permira Advisers LLC, has hired an investment bank to perform the auction.

Permira is a private equity firm. Let me see if I can remember how they work. I’m not an expert, so I may not have this completely right. But here’s how I think it works: A private equity firm is a company with expertise in buying and selling stock in privately owned companies. It invites people to give them money with the anticipation that ten years later they will get their money back, plus a profit. The pile of money is called a private equity fund. The firm takes the funds and buys multiple private companies. At the end of the ten years, the people want their money back, plus a profit. If the firm can’t deliver, people get awfully cranky. And they don’t want private shares of Ancestry.com; they want cold, hard cash.

So when Permira bought Ancestry.com back in 2012, it was expected that several years later they would want to unload it. I’ve been told that in the private equity world, three years is a long time. Well, we’re coming up on three years for Ancestry.com.

How much money will Permira make? It is hard to say, but let’s look at one, simplistic measure. In 2012 Ancestry.com sold $334.6 million in subscriptions and was sold for $1.6 billion. That put the value of the company at 4.8 times its subscription revenues. Last year they sold $553.8 in subscriptions. The same ratio would put their present value at $2.6 billion. Like I said, that’s pretty simplistic. Lot’s of other factors will be considered. But the Reuters “people” predicted a valuation of between $2.5 and $3 billion, so my napkin math is reasonable.

16 comments:

  1. I hope it is saved by a white knight that takes it private. Wall street is abount making money, then more money the next year, and when it doesn't make more money the third year its striped of its wealth then thrown into the trash. My only wish is that rootsweb survives, and maybe the LDS family will buy it and go private, taking the greed of wall street out of Genealogy. All the free start your own tree were to generate numbers to hook people into buying the stock. We ended with many trash trees which was my complaint. All we can do is hope that Genealogy can return to a hobby and not a business.

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    1. That Ancestry.com has been used as a cash cow, when basically it is nothing more than a hobby. is revolting!

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  2. And every time Ancestry goes up on the block users get scared and warn about securing your tree, sources and even download your raw DNA data. Though it would seem that Ancestry is too successful to be broken apart or die altogether, such sales do elicit uneasy feelings.

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  3. I honestly hope that Ancestry DOES sell and that the new owners actually CARE about genealogy and not just money. I know all companies have to make a profit, but since Permira has owned Ancestry, it had nothing but technical issues and have the practically been telling subscribers that they don't care about whether they get what they pay for. And in the last few months many records that I once could view are now "index only" on Ancestry which actually doesn't provide you with anything other than a name and is basically useless for real genealogy purposes.

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    1. See my at-length comment further below here. This all makes me feel very, very dirty.

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    2. Sadly websites have to have money to stay in existence.

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  4. My question to you, AI, is what are some of the main changes in operation after Permira took over? Any? Many? With that much money at stake to purchase, does it seem reasonable that there would just be another private equity firm that would take over and continue pretty much as is? So we need to just realize that things will continue to be fluid every few years?

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    1. All my patrons in the genealogy department of the local public library want is a decent program site in which to organize their data, and make contact with other researchers in order to share information. They appreciate being able to access documentation sources without having to travel across the country to visit some miniscule library out on the plains of Nebraska...in hopes of finding one tiny scrap of information. Ancestry.com gave them that ability, until recently, without pushing a screen lay-out like a third-rate Mondrian painting in their faces. Most significantly: Fie on the previous owners of Ancestry.com on looking more at money than providing a service to the researching public!

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  5. I wonder if Permira has adequately disclosed to any potential buyers just how unhappy many ancestry users are now with the possible release of the (severely degraded, in my opinion) "new ancestry".

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    1. Genealogists who trusted Ancestry.com have been sold down the river!

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  6. Genealogy is a hobby, not a commodity! I am a genealogy librarian, and until the roll-over happened with the "new" Ancestry this summer, my patrons/clients were completely pleased with the Ancestry.com program. To say that all of us are mortified by this horrific change world-wide is to put it mildly. For heaven's sake, someone, buy the package and privatize it, as has been suggested numerous times here already!

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  7. I thought Ancestry was sponsored by the LDS and was a church non-profit.

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    1. No, not owned by the church and never was. The church's Web site is Familysearch.org

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  8. When will their evaluation be revisited? .... in light of the thousands of people leaving Ancestry this week!!! Any idea?

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  9. My Wife is FAR from happy with what has happened and is continuing to happen with a Program she is TOTALLY dependent on for her "obsession" with Genealogy!! After almost 50 yrs "on the Job" so to speak she is worried!-its the only thing keeping her sane!( remember she has ME to contend with!!)
    As with the changes with Family Tree Maker i.e. being discontinued by Ancestry at the end of this year with no apparent advice as to locate a alternative program a she is not been able to find someone to help her? plus the Ladies in the local Library that she gives Classes to will be mortified and may well "storm the Ancestry.com Offices"!!

    Anybody who is able to "talk" to her via email/phone/clairvoyance will help a LOT!( plus make MY life more peaceful!!)

    her email is : peggyt@aol.com

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