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Private Equity Firm Blackstone Acquires Ancestry for $4.7 Billion

Fading interest and a tight market have forced Ancestry to seek greener pastures to keep their genomics tree growing.

Blackstone announced Wednesday that it will acquire Ancestry, the genealogy firm, from Silver Lake, GIC, Spectrum Equity, Permira, and other equity holders in the company for $4.7 billion.

Investor GIC will retain a significant minority stake in the company.

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. Ancestry was valued at $3 billion in 2017, according to PitchBook.It was even planning an IPO in 2017 and 2019 when the personal genetics business was booming.

Blackstone Acquisition of Ancestry

Blackstone Manhattan Office

The boom seems to have petered off recently with Ancestry and its nearest competitor, 23andme, suffering revenue losses. Both companies have laid off people. Ancestry laid off 100 people in February and 23andme cut off 14 percent of its staff.

The business landscape fell off a cliff last year,” said Laura Hercher, director of human genetics research at Sarah Lawrence College. “Fads pass.”

The company traces family trees through historical records and helps people gain a sense of their heritage and lineage. Ancestry is also a market leader in genomics where it breaks down your gene structure to give an idea of your health characteristics and your ancestry.

Both 23andme and Ancestry are trying to leverage this interest in health characteristics to help ride over waning interest in ancestry.

With access to technology and data, it is easy to transition to providing genetic abnormalities or tracing any unique health characteristics that you may have inherited.

David Kestenbaum, a Senior Managing Director at Blackstone, said: “We are very excited to partner with Ancestry and its management team. We believe Ancestry has a 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, managing director with Blackstone added that Ancestry is already a leader in its field and has a unique selling point with a technology platform that is modern and scalable.
He believes Blackstone and Ancestry have a good synergy and his company’s digital platform and capital can be leveraged to push Ancestry further.

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. 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.”

Choo Yong Cheen, chief investment officer of private equity at GIC, said they have been with Ancestry since 2012 and it's their innovative ideation, dedicated researching, the technological harnessing of the same that has seen them get ahead in the business.

According to the latest records available, Ancestry has sold 18 million DNA kits and provided access to an estimated 10 billion historical records. Its ancestry subscription service has 3 million paying customers; they charge $25 to $50 per month or $100 to $200 every six months.

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