• The stake will be purchased from investment firms Silver Lake, GIC, Spectrum Equity, Permira, among others
  • Ancestry generates more than $1 billion in annual revenue
  • Company is facing a lawsuit over its automatic renewal policy.

Blackstone Group Inc. (BX) said on Wednesday that some of the private equity funds it manages reached an agreement to acquire a majority stake in, the online family history business, in a deal that is valued at about $4.7 billion.

The stake will be purchased from investment firms Silver Lake, GIC, Spectrum Equity, Permira, and other equity holders.

Bloomberg reported that at closing Blackstone will own 75% of Ancestry, with Singaporean sovereign wealth fund GIC holding the other 25%.

Based in Lehi, Utah, Ancestry operates in more than 30 countries with more than 3 million paying subscribers and generates more than $1 billion in annual revenue. Ancestry also operates a consumer genomics business, which “informs consumers about their heritage and key health characteristics.”

“We are very excited to partner with Ancestry and its management team,” said David Kestnbaum, a senior managing director at Blackstone. “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.

"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,” he added.

Sachin Bavishi, a managing director at Blackstone, said: “Ancestry’s large network of highly engaged users, unique content, and scaled technology platform have made it a market leader.”

Looking ahead, said Margo Georgiadis, president and chief executive officer of Ancestry, “we will continue to leverage our unique content, powerhouse consumer brand and technology platform to expand our global Family History business while bringing to life our long-term vision of personalized preventive health.” initially went public in 2009, when it raised about $100 million. The company was taken private in 2012 in a $1.6 billion buyout led by Permira.

AdLawAccess reported that Ancestry was just hit with a $250 million lawsuit related to its auto-renewal policies.

The suit alleges that Ancestry violated California’s automatic renewal law by failing to properly disclose subscription terms – nor did it obtain the plaintiff’s consent for renewal.

The plaintiff reportedly was surprised to see recurring monthly charges appear after her free trial. The plaintiff claimed that hundreds of other people have had similar complaints about the company.

“It’s likely … that one of the key issues in the case will be whether the disclosures appear with the level of clarity required by law,” wrote AdLawAccess.