Bankrate president and CEO Kenneth S. Esterow said: "NextAdvisor’s success in leveraging its proprietary marketing techniques in the fast growing content marketing space will accelerate Bankrate’s efforts to move beyond search, most notably broadening our reach and giving us new ways to engage consumers looking for credit cards.
"The NextAdvisor team has built a terrific set of capabilities by engaging consumers with unbiased, comprehensive content, especially around credit cards, an approach that nicely complements Bankrate’s core business and value proposition."
Esterow added that the acquisition provides proprietary intellectual property, technological capability, analytics, and optimization, particularly relating to the fast-growing content marketing channel.
NextAdvisor founder and CEO Erik Larson said: "The NextAdvisor team has an immediate opportunity to extend its unique set of content marketing capabilities to a broader group of customers, products and services, including as a contributor to CreditCards.com."
The asset purchase includes upfront consideration of approximately $76.3m in cash and approximately $3.0m in time-based vesting restricted stock units.
The consideration also includes a potential earnout payment of up to $137.9m payable in cash or Bankrate stock and up to $7.8m in cash or time-based vesting restricted stock units based on the NextAdvisor business unit achieving certain growth targets over the 18 month period following the closing of the transaction.
The upfront payment represents a multiple of approximately 5 times NextAdvisor’s adjusted EBITDA for the trailing twelve months ended March 31, 2016 (pro forma for the removal of a one-time credit card marketing program benefit).
The maximum earnout payment will result in an overall purchase price multiple of no greater than 7.25 times an annualized adjusted EBITDA achieved over the earnout period (inclusive of the upfront payment).
The transaction is subject to certain closing conditions including antitrust review, and is expected to close before the end of Q2 2016.
Vista Point Advisors, a San Francisco based boutique investment bank, acted as the exclusive financial advisor to Next Advisor.
