Ancestry.com Going Public

Dick Eastman broke the news Monday evening that Ancestry.com is going public. They have filed Form S-1, their initial public offering (IPO) registration statement with the Securities and Exchange Commission (SEC). The number of shares and offering price have not been announced, but the IPO is currently anticipated to raise about $75 million for the company.  Once public, Ancestry.com will be listed on either the Nasdaq or New York Stock Exchange under the symbol ACOM. The SEC must declare the registration “effective” before Ancestry.com can execute the IPO. Until the registration is effective, Ancestry.com is in a regulatory “quite period” during which it can’t say peep about the IPO.

I have to agree with Eastman’s conclusion that The Generations Network recently changed their name to Ancestry.com for the express purpose of this IPO. “Ancestry.com” is their strongest brand and will give them the biggest bang for their buck in the IPO.

The intricacies of an IPO are such that an offering company typically relies upon an investment bank to assist, or underwrite, the process. The underwriter assists in pricing, arranging for legal representation, kicking off research coverage, and—most importantly—using its considerable sales muscle to arrange sales agreements with large customers prior to the IPO.

Ancestry.com is a late-stage IPO. Founders can usually make more money doing an IPO in the early growth stages of a company, when the annual growth rate is much higher than it is for a mature company. Ancestry.com is past the high-growth stage, is worth hundreds of millions of dollars, and is raising a considerable amount of money. In this situation, it is common to have a syndicate of investment banks handle the IPO. For Ancestry.com, Morgan Stanley and BofA Merrill Lynch will act as lead investment banks, and will be assisted by BMO Capital Markets, Jefferies & Company, and Piper Jaffray.

My good, personal friend, the Silicon Alley Insider, reports the fees that each of these banks will likely earn from the IPO could be around:

	Morgan Stanley	33%	$1.5 million
	Merrill Lynch	33%	$1.5 million
	Jefferies & Company	11%	$500,000
	Piper Jaffray	11%	$500,000
	BMO Capital Markets	11%	$500,000

 

Ancestry.com’s S-1 can be read in its entirety on the SEC’s website.