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The giant private equity firm KKR, which is still led today by two of its original founders Henry Kravis, and George Roberts, has announced it has signed a definitive agreement to purchase the technology company Internet Brands.
KKR are making the purchase in partnership with Internet Brands’ CEO Robert Brisco and other members of his management team. KKR are buying the company from two other private equity firms, Hellman & Friedman and , JMI Equity, in what is known as a secondary transaction.
Financial terms of the deal have not been officially disclosed, but the purchase price is based on an enterprise valuation of around $1.1 billion, according to an early report on the pending transaction aired in the New York Times. Hellman & Friedman and JMI had acquired the company themselves for $640 million as recently as 2010, and then delisted it from the Nasdaq.
Internet Brands operates leading branded websites and vertical software solutions in four primary markets: auto, health, legal and personal. The Company’s web sites attract more than 100 million unique visitors per month and serve more than 100, 000 small and medium businesses and advertisers. The Company has approximately 1, 600 employees and is headquartered in El Segundo, California.
The company’s CEO Bob Brisco said, “We’re delighted to be partnering with KKR at this important juncture in our business, when we have dramatically expanded our client solutions portfolio and our growth in key areas is accelerating.”
Herald Chen, a partner at KKR and Co-Head of the firm’s technology investing team, added, “Internet Brands is at an exciting inflection point of growth as the company transitions from a portfolio of web assets to a vertically integrated provider of media and client software solutions. Its growth has been driven by its propriety operating platform and a management team with a focused vision. We look forward to partnering with the team and supporting the company in its next phase of growth.”
Tarim Wasim, Managing Director of Hellman & Friedman who are selling the firm, said, “We have had a very successful partnership with Bob and the entire Internet Brands team. We are proud of the Company’s performance and transformation, and wish the team continued success under KKR’s ownership.”
Internet Brands owns websites like Lawyers.com, CarsDirect.com and ApartmentRatings.com. Recently the company has also expanded into SAS offerings (“software as a service”) providing corporate solutions as well. Its Autodata business provides marketing data services to companies like Toyota, Ford and Chrysler, for example.
KKR has an established history of investing in technology businesses, including recent investments in Go Daddy, Mitchell, Aceco TI, Visma, Fotolia, and Ipreo. KKR is making this new investment through its North America XI private equity fund. The transaction is of course subject to the usual closing conditions.
As a global investment firm KKR manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. The company hopes to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation at the asset level.
KKR invests its own capital directly as well, alongside its partners’ capital and also brings opportunities to others through its capital markets business.