Google’s acquisition of DoubleClick for $3.1 billion indicates that we aren’t in Kansas anymore. Fred has a good riff titled The Banner Is Back and the WSJ does a good job decomposing the return for private equity firm Hellman & Friedman. Finally, Paul Kedrosky weighs in with some interesting “Microsoft vs. Google” speculation and a suggestion that we are looking at a 12x FTM revenue multiple for ClickClick.
For those of you too lazy to clickclick once through to the WSJ analysis, H&F bought DoubleClick for $1.1b in 2005, although it appears they only used $330m in equity for the purchase. They sold off several pieces of DoubleClick (Abacus for $430m and the email business for about $100m) resulting in a return of over $3.6b for an investment of $330m less than two years ago.
No one has mentioned any cash dividends that H&F might have taken out of the business so the number could be even higher (and – depending on how things are structured – the investment basis might be even lower.)
There’s only one word for this. “Score!”
I’ve had my share of experiences with DoubleClick over the years (competition, acquirer of one of the companies I was an investor in, and investor of another company that I’m an investor in.) Now that they are destined to be part of Google, it’ll be interesting to see if they finally live up to their potential or if this is merely yet another chapter in the long and convoluted story that is DoubleClick.