Private equity firm to buy Ancestry.com for $1.6B

Genealogy website Ancestry.com has agreed to be acquired by a group led by European private equity firm Permira Funds in a cash deal valued at about $1.6 billion.

The offered price of $32 per share is a nearly 10 percent premium over Friday's closing price of $29.18. Its shares jumped 8 percent, or $2.37, to $31.55 in premarket trading Monday.

Ancestry.com operates a website for researching family history and has more than 2 million paying subscribers. It says more than 10 billion records have been added to its site over the past 15 years.

The company said it has developed and acquired systems that digitize handwritten historical documents, and it works with government archives, historical societies and religious institutions around the world.

The company went public in 2009. Last year, it earned $62.9 million, or $1.29 per share, on nearly $400 million in revenue.

Ancestry.com said that the price represents a 41 percent premium over its closing price in early June before reports surfaced that the company had retained a financial adviser for a possible sale. Company shares have climbed from around $21 in early June and hit a 52-week high of $33.80 in early August before dropping back.

It said there will be no anticipated changes in its operating structure with the deal. The company will remain headquartered in Provo, Utah, and it will continue to focus on investing in content, technology and expanding product offerings in areas like DNA.

CEO Tim Sullivan and Chief Financial Officer Howard Hochhauser will keep a majority of their equity stakes, and Spectrum Equity will remain an investor. Spectrum owns a 30 percent stake in the company.

The company expects the deal to close early next year. It will announce third-quarter earnings on Wednesday.