Blackstone To Snatch Up Ancestry For $4.7B; Analyst Says Stock Fairly Valued

Blackstone Group said Wednesday it agreed to buy genomics and family history provider Ancestry from a group of private equity firms for a total of $4.7 billion.

As part of the agreement, Blackstone (BX) will acquire Ancestry from Silver Lake, Singapore’s sovereign wealth fund GIC, Spectrum Equity, Permira, and other equity holders. In addition, GIC will continue to maintain a significant minority stake in the company.

“We believe Ancestry has significant runway for further growth as people of all ages and backgrounds become increasingly interested in learning more about their family histories and themselves,” said David Kestnbaum, a Senior Managing Director at Blackstone. “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.”

The deal is part of Blackstone’s “continued, high-conviction focus on investing in growing, digital consumer businesses, which are resilient in the current environment and beyond,” Kestnbaum added.

Ancestry is a leading digital family history provider, operating in more than 30 countries with more than 3 million paying subscribers across its online platforms and earns more than $1 billion in annual revenue. The company harnesses the information found in family trees and historical records. Ancestry also operates a consumer genomics business, which informs consumers about their heritage and key health characteristics.

BX shares appreciated 1.5% to $52.94 on Wednesday trimming this year’s decline to 5.4%. Meanwhile, the average analyst price target of $61.30 indicates 16% upside potential is lying ahead over the coming year. (See Blackstone stock analysis on TipRanks).

Oppenheimer analyst Chris Kotowski at the end of July maintained a Hold rating on the stock, saying that his current valuation framework suggests that the stock is fairly valued.

“We view the stock as an attractive core growth holding, but near-term it is trading at roughly a 15% premium to the S&P, roughly in line with its average last year,” Kotowski wrote in a note to investors.

Overall BX scores a cautiously optimistic Moderate Buy analyst consensus which breaks down into 7 Buys versus 4 Holds.

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