With Main Street still largely in disarray, despite the billions of dollars left in Fed-backed lending programs for small and medium-sized businesses and Ice Cube asking "where's our f**king bailout?", we imagine the millions of newly impoverished Americans can appreciate the fact that America's jet-setting private equity barons are still doing their thing. After all, a pandemic is trivial compared with Steve Schwarzman's insatiable lust for more - more assets, more capital, more recognition.
As America's obsession with race and lineage intensifies thanks to the left's embrace of 'identity politics', Schwarzmann has found a clever way to cash in on this trend, by paying top dollar for Ancestry.com. In a $4.5 billion deal - a staggering number, especially considering that Silver Lake and Singapore's Sovereign Wealth Fund acquired their majority stake for just $2.6 billion 4 years ago.
Though GIC will retain a significant minority stake, the deal appears to be a play for a quick IPO turnaround (though they may need to move quickly).
Since Blackstone is buying a relatively mature company with a huge marketing budget and a DNA network of 18 million people, we suspect Schwarzman's plan is to pray that the market holds up (we'll see what his buddy Jerome Powell has to say about that during his virtual Jackson Hole speech), at least long enough for Blackstone to take Ancestry.com public, and saddle retail investors with any long-term losses.
According to Blackstone's press shop, the deal will be the first acquisition of the "largest ever private equity fund" which was recently raised by the $564 billion AUM asset manager, leaving it flush with cash during a period of market frenzy utterly at odds with the underlying economic fundamentals.
Bloomberg reports that deal talks regarding Ancestry.com started a few months ago when much of the world was still at home and looking for things to do, which increased the appeal of its by-mail business, which saw a boost in traffic.
We can see a slightly more sinister side to the deal: Pretty soon, Schwarzman & Co. will know which Americans' ancestors owned slaves, and which did not.
Read the press release below:
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New York, August 5, 2020 – Blackstone (NYSE:BX) today announced that private equity funds managed by Blackstone (“Blackstone”) have reached a definitive agreement to acquire Ancestry® from Silver Lake, GIC, Spectrum Equity, Permira, and other equity holders for a total enterprise value of $4.7 billion. Current Ancestry investor GIC will continue to retain a significant minority stake in the company. This transaction represents the first control acquisition for Blackstone’s eighth vintage of its flagship private equity vehicle.
Ancestry is the global leader in digital family history services, operating in more than 30 countries with more than 3 million paying subscribers across its Ancestry online properties and more than $1 billion in annual revenue. The company harnesses the information found in family trees and historical records to help people gain a new level of understanding about their lives. Ancestry also operates a market-leading consumer genomics business, which informs consumers about their heritage and key health characteristics.
David Kestnbaum, a Senior Managing Director at Blackstone, said: “We are very excited to partner with Ancestry and its management team. We believe Ancestry has significant runway for further growth as people of all ages and backgrounds become increasingly interested in learning more about their family histories and themselves. We look forward to investing behind further data, functionality, and product development across Ancestry’s market leading platform to continue to provide a differentiated service. Our investment is a prime example of Blackstone’s continued, high-conviction focus on investing in growing, digital consumer businesses, which are resilient in the current environment and beyond.” Sachin Bavishi, a Managing Director at Blackstone, added: “Ancestry’s large network of highly engaged users, unique content, and scaled technology platform have made it a market leader. We look forward to contributing Blackstone’s resources and leveraging our strong expertise in digital content to further accelerate Ancestry’s growth."
Margo Georgiadis, President and Chief Executive Officer of Ancestry, said: “Our entire leadership team is thrilled to have the opportunity to partner with Blackstone to further accelerate Ancestry’s global leadership in family history and consumer genomics, and to help us achieve our mission to empower journeys of personal discovery to enrich lives. Looking ahead, in collaboration with Blackstone, we will continue to leverage our unique content, powerhouse consumer brand and technology platform to expand our global Family History business while bringing to life our long-term vision of personalized preventive health.” Howard Hochhauser, Ancestry’s Chief Financial Officer and Chief Operating Officer, added: “We want to thank Silver Lake, GIC, Spectrum Equity and Permira for their support in helping set up Ancestry for our next phase of growth.” Stephen Evans and John Rudella, Managing Director and Director at Silver Lake, respectively, said: “We thank Ancestry’s management team, employees, and our co-investors on the board including GIC and Spectrum, as well as our Board Chairman Tim Sullivan, for their partnership during a period characterized by impressive growth, accelerating technology innovation and expansion across new products. We will be cheering on from the sidelines going forward, and hope and expect that the company will achieve continued success under Blackstone’s ownership."
Choo Yong Cheen, Chief Investment Officer of Private Equity at GIC, said: “Ancestry is the clear leader in helping people discover, preserve, and share their family histories. As a long-term investor, we are proud to have contributed to Ancestry’s family history mission since 2012, and we are confident the team will continue to innovate for years to come. We appreciate the contributions of Silver Lake, Permira, and Spectrum and look forward to partnering with the Blackstone and Ancestry teams for this next phase of growth."
Morgan Stanley & Co. LLCserved as lead financial advisor to Ancestry. Barclays also served as a financial advisor to Ancestry. Latham & Watkins LLP is serving as legal advisor to Ancestry and Simpson Thacher & Bartlett LLP is serving as legal advisor to Blackstone. Dechert LLP is serving as legal advisor to GIC.Committed debt financing for the transaction was provided by Bank of America and Credit Suisse.
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