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Provo-based Ancestry.com said Thursday it will issue about $27 million in new shares to buy iArchives Inc. of Lindon, the owner of the website Footnote.com that provides access to digital versions of historical documents and newspapers.
But Ancestry.com also said it would initiate a $25 million stock buyback program in part to offset the dilution of its stock that would result from the new shares used for the purchase of the privately held iArchives.
The deal is the third purchase of another company this year by Ancestry.com, which went public in November.
CEO Tim Sullivan said the offerings of historical documents and newspapers by subscription on Footnote.com complement the billions of historic records his company has online for subscribers wishing to research family history.
"For us, a company with a very significant reach with 1.3 million subscribers, the opportunity to embrace and invest in a second brand and offer that incremental service to members of our community is a great opportunity from a business perspective to grow even further," Sullivan said in an interview.
With completion of the purchase, expected in fourth quarter, Brian Hansen, a product manager at Ancestry.com, will become general manager of iArchives, Sullivan said. Russell Wilding, CEO of iArchives, will be leaving that post.
Footnote.com holds digital images of more than 65 million American historical records and makes them available to about 35,000 subscribers. Its holdings include records from the Revolutionary War, Continental Congress, Civil War and other historical events.
When the deal is completed, iArchives will be a wholly owned subsidiary of Ancestry.com but will remain in its Lindon offices, Sullivan said. Ancestry.com has about 550 employees in Utah, but he declined to say how many people work at iArchives.
"We actually intend to continue and accelerate investments for new content for Footnote.com as well on this great technology platform [and] bring to bear the considerable leverage we have in marketing," Sullivan said.
Ancestry.com said it expects to issue about 1 million shares of common stock as part of the transaction. Its shares closed up 3 percent, or 68 cents, to end trading Thursday at $22.87.
The company also announced Thursday that its board has approved a share repurchase program of up to about $25 million of common stock. In a filing with the Securities and Exchange Commission, it said, "Part of the rationale for the share repurchase program is to offset the issuance of shares of the company's common stock as a result of the iArchives acquisition."
Century Capital of Boston and the Canopy Group of Lindon are the majority owners of iArchives.
In 2007, iArchives signed a deal with the National Archives and Records Administration, the agency that cares for billions of documents generated by the federal government since its inception. The Utah company agreed to produce digital copies for the National Archives for free in exchange for allowing it to make the images available for a charge on its website. —
Ancestry.com's 2010 buying spree
Since going public in November of 2009, the company has:
Bought the Swedish family history website Genline.se.
Acquired ProGenealogists Inc., a genealogy research company in Salt Lake City.
On Thursday, purchased iArchives and its Footnote.com of Lindon.