Bankaholic.com - Strategic Sale

THE TRANSACTION:

Bankaholic.com has been acquired by publicly-held Bankrate, Inc. (Nasdaq: RATE), the Web’s leading aggregator of financial rate information, for $12.4 million in cash at closing and an additional $2.5 million earnout payable within twelve months of closing based upon the achievement of certain performance metrics.

THE COMPANY:

Formerly headquartered in San Marino, California, Bankaholic.com provides rate information on savings products, such as certificates of deposit, savings accounts, and money market accounts, as well as insurance quotes and a comparison of credit card offers.  In addition, the site offers consumers advice and information, while also providing a forum that allows these consumers to comment on and rate banks and their promotional activities through social networking features.  Bankaholic was launched in July 2006 and consistently ranks as one of the most trafficked financial web publishing sites in its targeted niche. 

DESCRIPTION OF TRANSACTION:

In the months leading up to the transaction, Bankaholic’s founder and sole owner, Johns Wu, had relied on Founders for tactical planning and advice about how best to position his company for a sale in the upcoming future.  As the site continued to grow in prominence and draw interest from potential outside investors, Mr. Wu engaged Zane Tarence and Founders Investment Banking’s Internet and Digital Media team to advise him as he considered the range of options available on the broader capital markets.   Ultimately, Founders advised Bankaholic on a strategic sale to publicly-traded Bankrate (Nasdaq: RATE), marrying the site with  a recognized leader in the financial web publishing space and one that is best positioned to capitalize on what Johns Wu had built at Bankaholic.  The transaction process accomplished Mr. Wu’s three primary objectives: i) Meaningful Liquidity Event – Mr. Wu will receive up to $14.9 mm in cash as part of the transaction, ii) Favorable Closing Period – The transaction closed within 21 days of the signing of the initial LOI with no material change in deal terms, and iii) Short Transition Period – Mr. Wu will remain in a transition/advisory role for no longer than 12 months.