Hellman & Friedman buys Internet Brands for $640 million
Posted by Wilson Kanaday on Mon, Sep 20, 2010 @ 04:37 PM
Hellman & Friedman, a private equity firm based out of San Fransisco, announced they acquired Internet Brands for $640 million. Hellman & Friedman paid roughly 6.4x Internet Brands' 2009 revenue of $99.8 million.
Interestingly, just last week Accumen Holdings, a start up from Arkansas presented at a Venture Forum in Little Rock. Certainly, this acquisition in their space can't make them do anything but smile.
I do have one concern about these media companies. Their processes and algorithms must be awesome. But, they are playing online business like a pure market. So what prevents other large (or small) media companies from entering the space. Are the visitors/clients to/of CarsDirect.com really that loyal to the brand? If they aren't they'll be easy to draw to the next thing. Now maybe that is all accounted for. But it seems like the downward pressure on margins and the lack of personal touch would make it difficult to sustain these businesses over the long haul; much like the old Adsense arbitrage websites.
All of that aside, and my concerns might be absolutely unwarranted, I would continue to bet on any business that has developed the processes to make a strong entrance in the online business realm.
UPDATE: Bob Brisco's comments on the deal can be found here.