Seattle-based Avvo, which runs an online legal directory, marketplace and reviews site, has entered into an agreement to be acquired by Internet Brands, a large holding company whose portfolio includes companies such as eDoctors, CarsDirect Connect and WebMD.
Internet Brands is especially strong in the legal arena, holding interests in Lawyers.com, AllLaw.com, Martindale-Hubbell and Nolo. That strength played a big role in the company’s decision to be acquired.
After raising $71.5 million in venture funding three years ago, Avvo appeared to be on a fast track for an initial public offering. At the time of that funding, Bloomberg News pegged the company’s valuation at about $650 million. Backers of the company included Technology Crossover Ventures, Vulcan Capital, Ignition, Coatue, Expedia and Zillow co-founder Rich Barton and others. It had raised $132 million in venture capital.
It’s unclear whether Avvo got that much in the acquisition. Financial terms of the deal were not disclosed. However, in an interview with GeekWire, Avvo CEO Mark Britton said the outcome was a positive one for the company’s investors.
“That’s one of the reasons this deal was so attractive, is that everyone gets financial returns,” Britton said, calling it “a big, fair price.” He declined to say whether the purchase price topped the reported $650 million valuation from three years ago.
Britton said that the Avvo considered going public, a discussion that the board “debated for a long time.” But one factor that led to the acquisition was the strength that Avvo would achieve by allying with other top legal companies in the Internet Brands portfolio.
“You look at someone like Internet Brands and they get legal,” said Britton, adding that the acquisition made “perfect sense.” Britton, the former general counsel at Expedia, also compared the deal to the historic relationship between Expedia and holding company IAC. In the early 2000s, IAC owned Expedia and a number of other travel-oriented brands.
In that regard, Britton said the alliance between Avvo and Internet Brands “feels like Groundhog Day.”
“IAC had this very nice collection of travel assets and plugging Expedia in, they had just this really neat collection that allowed … all of them to deliver all sorts of neat products and services. And so that’s what we’re hoping to do” with Internet Brands, Britton said.
Google — a competitor to Avvo — also played a role in the decision to go down the acquisition path.
“One thing that I think is very important in this kind of modern age of Google as both a partner and a competitor is that scale … is really everything,” said Britton, adding that Avvo will be able to help more consumers and lawyers through its connections to Internet Brands. “It also gives us greater diversity and stability in our business as we compete with someone like Google who is out there in a lot of ways regulating what’s going on with the internet.”
Avvo will continue to operate from its headquarters in Seattle under the direction of the existing leadership team, according to a press release announcing the deal. Britton said that there will be no changes to the company’s workforce, which now stands about about 350 people.
“It’s business as usual,” said Britton. “One of the things that we absolutely want to do is spend time with Internet Brands and get to know where we’re strong and how we can help each other.”
The profitable company is ranked #8 on the GeekWire 200, our index of privately-held technology companies in the Pacific Northwest. (Per the rules of the GeekWire 200, Avvo will now be removed from the list).
“Avvo’s culture of rapid innovation with the mission of serving both consumers and attorneys mirrors the strategy that has guided the Internet Brands Legal portfolio to strong growth over the past decade,” said Robert Brisco, CEO of Internet Brands in a press release. “We look forward to continuing to transform how consumers connect with attorneys while helping attorneys grow their businesses.” Internet Brands is owned by KKR, the giant private equity firm.
Avvo was co-founded in 2006 by Britton, Paul Bloom and Sendi Widjaja.