Bankrate (RATE 12.85), a leading online publisher, aggregator, and distributor of personal finance content, was founded in 1976, which was the bicentennial year for the United States. It seems only fitting, then, that Bankrate would announce an agreement to be acquired as the nation readies to celebrate its 241st birthday.
That's just what Bankrate did this morning, too, noting it has entered into a definitive agreement to be acquired by Red Ventures, a leading digital consume choice platform, for $14.00 per share.
This will be an all-cash acquisition that values Bankrate at an enterprise value of approximately $1.4 billion. The per share offer price is a 9% premium over Friday's closing price for RATE and an approximately 31% premium over RATE's three-month average closing share price.
In turn, it represents a huge premium for anyone who bought RATE at last year's all-time low below $7.00 per share; however, it will still fail to make a lot of investors whole considering RATE spent the majority of its time trading north of $15.00 per share between its IPO date in 2011 and mid-2014.
Strikingly, RATE is trading at $14.05 in pre-market action, which suggests investors feel it could eventually fetch a larger premium than the one currently being offered by Red Ventures.
The latter point notwithstanding, Bankrate's Board of Directors felt this was a good time to sell the company as it believes Red Ventures can take the Bankrate businesses to the next level of success. Red Ventures feels the same, saying it will use its technology, strategic partnerships, and digital expertise to build on Bankrate's leading platforms, which include CreditCards.com, Bankrate.com, and Caring.com.
The deal is subject to shareholder and regulatory approval, but it is expected to close before the end of the year.