London-based mega-firm Apax Partners has offered $571 million to buy Bankrate.com, which owns a network of financial-focused websites.
Apax will pay $28.50 per share in the deal, a 15.8 percent premium over the closing stock price on Tuesday. Apax is providing 100 percent of the financing for the deal, Bankrate.com said in a statement.
Apax chief Martin Halusa said the firm is likely to do more all-equity deals given current market conditions.
“In this environment, where banks have scaled back their lending, the percentage of our own equity that our funds use to back companies will increase. Indeed, many investments will be equity only,” said Halusa.
The Bankrate.com deal is expected to close at the end of the third quarter.
Bankrate.com covers two of Apax’s “core investment sectors”, media and financial institutions, Mitch Truwit, a partner at Apax, said in a statement.
Bankrate.com runs a network of personal finance websites. Bankrate.com itself is the flagship brand and aggregates rates and other information on more than 300 financial products like mortgages, credit cards, new and used auto loans and money market accounts. Bankrate.com has a network of 75 partners, including the Wall Street Journal and the New York Times, that uses the website’s information.
The company’s revenue slipped in the second quarter, according to preliminary reports released Wednesday. Total revenue for the second quarter is expected to be $31 million, compared $40.2 million reported in the second quarter of 2008. Net income is expected to be $1.9 million, compared to $4.1 million in the same period last year.
Bankrate.com’s earnings before interest, taxes, depreciation and amortisation are expected to slip 26 percent, from $12.8 million in the second quarter 2008 to $9.4 million in the second quarter this year.
Several Apax portfolio companies have struggled in the market downturn of the past year, including several that have gone into administration. In March, Streetbroadcast, which provides street advertising, filed for administration after laying off about 70 percent of its staff. Apax bought the company in 2003 for an undisclosed sum.
Incisive Media, another Apax company, has struggled to negotiate its debt and reportedly is on the cusp of being taken over by banks, which could wipe out the firm’s stake in the company.