The New York-based investment management and financial services firm the Blackstone Group is set to acquire the genealogy website Ancestry.com in a deal worth up to $4.7 billion, they announced on Wednesday.
Ancestry.com is currently the world’s biggest for-profit provider of genealogy and DNA services, which allows users to trace their ancestry and heritage online, as well as identify any potential genetic health risks.
Based in Lehi, Utah, Ancestry.com launched in 1996 and now coasts over 3 million customers and 18 million people in its DNA network in over 30 countries, bringing in more than $1 billion in revenue each year.
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What started as a simple family history website has now expanded its offering to capitalise on advances in DNA technology, as well as offering a mobile application.
Ancestry.com was previously owned by private equity firms Silver Lake, Spectrum Equity and Permira, while GIC, the sovereign wealth fund of Singapore has stated that it will retain a significant minority stake in the company (believed to be around 25%).
The move shows Blackstone taking a big gamble on the genealogy market, banking on consumers staying at home due to the COVID-19 pandemic deciding to turn to Ancestry.com’s services and follows a pattern of other recent investments in growth companies and those likely to benefit from shifts in consumer behavior, such as Oatly AB and MagicLab.
David Kestnbaum, senior managing director at Blackstone said:
“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.”
The deal also marks the first acquisition made by the firm’s Blackstone Capital Partners VIII private equity fund, which raised $26 billion last year and also shows a sharp increase in the company’s valuation, having been valued at $2.6 billion just four years ago.
Blackstone themselves were recently revealed to be one of the companies with the highest profit per employee in the US, with research from Tipalti showing that the firm brought in just over $700k profit for each of their 6,892 employees.
The firm has been flush with cash in recent months as investors bet big on them amid the uncertainty of the COVID-19 pandemic, after successfully navigating the 2008 financial crisis, suggesting they may be well placed to benefit from the current situation.
