Ancestry.com Rumored on the Verge of a Buyout

Ancestry.com (NASDAQ: ACOM), the online family history resource, is said to be in buyout discussions with private equity firm Providence Equity Partners.

Benzinga reported Tuesday that an Ancestry.com spokesperson had no comment on the New York Times report regarding possible private equity talks.

On June 7, Benzinga wrote that Ancestry.com had hit a high of $26.16 following the news that the company had aligned with Qatalyst Partners to shop for buyers, and that Google (NASDAQ: GOOG), Facebook (NASDAQ: FB) and some private equity firms were rumored to be interested.

Shares in Ancestry.com were bouncing around as the rumor surfaced and settled. Shares fell about 2 percent Tuesday to $27.23, but the company rebounded to open nearly 16 percent higher on Wednesday.

The Ancestry.com website went live in 1996, so it is considered a veteran player of the internet with the likes of Amazon (NASDAQ: AMZN) and eBay (NASDAQ: EBAY), both of which started in 1995.

The New York Times quoted Dougherty & Company analyst Raghavan Sarathy as saying, "The way it's trading, people think it's a no-grow. But there should be interest from private equity because they are generating copious cash.”

With just about every other major internet company appearing to be standing in line waiting to go public, Ancestry.com going private would be bucking the trend. However, the fact that the website is profitable -- thanks to its two million subscribers that pay between $12.95 and $34.95 per month -- leaves the company feeling very comfortable.

In 2011, Ancestry.com earned $399.7 million in revenue and $62.9 million in net income from continuing operations.

On Wednesday, Ancestry.com traded at $30.95, up 13.7 percent.

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