Apax Set to Clean House in Bankrate IPO... The Private Equity Flip (RATE)

Bankrate, Inc. is about to be public again.  This online personal finance content maker was taken private by affiliates of Apax Partners.  The terms of the initial public offering are currently for some 20 million shares with a price range of $14.00 to $16.00 per share.  The company itself is offering 12,500,000 of the shares in the offering and the existing shareholders are offering an additional 7,500,000 shares.  For a fully diluted count the prospectus uses 100 million shares, generating a diluted market cap of close to $1.4 to $1.6 billion based upon the offering price.  The company plans to list shares on the New York Stock Exchange under the symbol “RATE.”

The company’s personal finance categories cover mortgages, deposits, insurance, credit cards, retirement, auto loans, and taxes. The website also aggregates information about rates from over 4,800 institutions on more than 300 financial products, with coverage of nearly 600 local markets in all 50 U.S. states.  The company boasts some 172,000+ distinct rate tables capturing on average over three million pieces of information daily.  The site claimed over 150 million visits in 2010.  The company’s editorial staff includes 33 editors and reporters, 90 freelancers and 15 expert columnists which generate more than 150 new articles per week on top of over 50,000 stories in its database.

The company will  enter into revolving credit facilities of up to $105 million around the time of the closing of the offering.  Affiliates of Apax Partners, L.P. own about 90% of the company.  The underwriting group is massive considering the size: Goldman Sachs, BofA Merrill Lynch, Citi, J.P. Morgan, Allen & Company, Credit Suisse, Stephens Inc., RBC Capital Markets, and Stifel Nicolaus Weisel.

Bankrate probably sounds familiar as a public company.  After 10 years as a previous public company, Bankrate was acquired on August 25, 2009 by Apax’s Ben Holding.  Since then, it has executed several acquisitions and two are NetQuote Holdings and CreditCards.com.  As far as how this ties into the Apax value, Apax advises or manages more than $35.0 billion directly or indirectly.  While the acquisitions will throw a wrench in the machine on estimating the carry-cost, it should be known that Apax paid roughly $571 million for Bankrate back in 2009.

There is a difference between OldCo and NewCo for revenues and earnings.  Those can be seen in the financial section of Bankrate’s full IPO amended filing.

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JON C. OGG