Internet Brands, the media company behind CarsDirect.com, Autos.com, and close to 100 other vertical sites, announced this morning that it had been acquired by private equity firm Hellman & Friedman Capital Partners VI.Internet Brands’ shareholders will receive $13.35 per share, almost a 50% premium over its closing price on Friday.
This is approximately 6X the company’s 2010 revenue and 16X 2010 free cash flow.
The deal is good news for other Internet content/commerce sites. The M&A market is clearly waking up again.
Internet Brands, Inc, a leading Internet media company, today announced that it has entered into a definitive merger agreement to be acquired by an affiliate of Hellman & Friedman Capital Partners VI, L.P. in a transaction valued at approximately $640 million. Under the terms of the agreement, Internet Brands stockholders will receive $13.35 in cash for each outstanding share of common stock they own. This price represents a premium of approximately 46.5% over the closing price on September 17, 2010.
The Board of Directors, on the unanimous recommendation of a Special Committee of independent directors, approved the merger agreement and recommends that Internet Brands’ stockholders adopt the merger agreement.
“We are very happy for our stockholders — this is a great outcome. And we’re excited about continuing to build our business with a great new partner,” said Bob Brisco, CEO of Internet Brands. “We are deeply grateful to those who have shared the journey with us this far. And we are looking forward to the next leg of building a powerful New Media company with our new owners.”
“Internet Brands is a uniquely positioned internet media company,” said Andy Ballard, Managing Director at Hellman & Friedman. “The company has built an impressive platform for branded vertical websites. We look forward to partnering with Bob and the entire Internet Brands team to support the company’s continued success.”
Debt financing commitments have been provided by Bank of America, N.A., BMO Capital Markets, GE Capital and RBC Capital Markets. Idealab, which beneficially owns approximately 19% of Internet Brands’ outstanding common stock and approximately 64% of the voting power of the company, has entered into a voting agreement with an affiliate of Hellman & Friedman relating to the merger agreement. The transaction is subject to stockholder approval, including approval by holders of a majority of the outstanding common stock not owned by Idealab and certain other excluded parties, and customary closing conditions. The transaction is expected to close in the fourth quarter of 2010.
Jefferies & Company, Inc. is acting as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to the Special Committee of the Board of Directors of Internet Brands. Munger, Tolles & Olson LLP is serving as counsel to Internet Brands. Simpson Thacher & Bartlett LLP is serving as counsel to Hellman & Friedman.