Nextag Sold to Private Equity Firm for $1.2 Billion

By Sean Fenlon on June 10, 2007


What is cool about being a weekend blogger is getting the scoop on 2 days out of the 7-day work week (~30% — not bad).

Last time a hot news item hit the wires on a weekend, it was the DoubleClick purchase by Google.

This time, however, the news is about Nextag.

Here are the Headlines:

  • NexTag Sold 66% Stake for $1-$1.2 Billion
  • Private equity buying big piece of Nextag
  • Providence takes $830 million stake in NexTag
  • Does NexTag buyout signal a top for private equity?
  • Etc.

WOW! That’s big. Just in case all the recent chatter about “Billions” of dollars has affected your sensitivity to such a number, let me help put that in perspective with an offline comparison. $1.2 Billion is exactly the amount that Forbes magazine reported as the value of the entire New York Yankees franchise. So, even if you’re unfamiliar with Nextag, let that one sink in for a moment.

In case you don’t already know, Nextag does many things, but primarily Nextag sells leads. Nextag is a private company, but most reports concur that the biggest market for Nextag is the sales of mortgage leads to originators. Nextag has also been widely reported (though unconfirmed by any official source) to be generating between $120M-$200M per year. That would put the Nextag valuation at a 6X-10X sales multiple.

DoublePositive also sells leads (we are the leader in the LIVE leads and Hot Transfers space). Thus, I would be an irresponsible CEO to not mention that DoublePositive will absolutely benefit from this significant recent comp in our space.

Lending Tree sold to IAC in 2003 for a 7X (stock) sales multiple.

LowerMyBills.com sold to Experian in 2005 for an estimated/reported 3X+ (cash) sales multiple.

6X-10X (cash) is a significant up-tick in premium compared with comps from previous years.

The M&A rundown in our last PositiveWire totaled over $10 Billion, so this deal adds another 10%+ on top of that.

Wow again.

I have become friends with the Chief Coffee-making Officer at Nextag and congratulate him on the sale and his years of effort.

So, it is official, the top five mortgage lead companies have been sold (or majority-sold) and are no longer wholly-owned by the respective founders:

  • Lending Tree
  • LowerMyBills
  • Nextag
  • iLeads
  • eLeadz/GoApply

I am tempted to put TheLoanPage.com on this list, but I won’t be so bold given its R.I.P. status.

SPF


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