Oak Hill Capital Partners Acquires VC-Backed Alibris
Written by: Matthew Monks
Date: May 9, 2006
Venture-backed Alibris—which helps people buy hard-to-find books online—has agreed to be acquired by Oak Hill Capital Partners, which will help the company the [sic] branch out overseas and into the used movies and music markets.
Emeryville, Calif.-based Alibris has gotten some $50 million in the last seven years from backers Aberdare Ventures, Bedrock Capital Partners, CMGI @Ventures and Lightspeed Venture Partners, formerly known as Weiss Peck & Greer Venture Partners.
The last $3 million round of funding came in September 2004, after the company withdrew a planned public offering, citing pricing weakness. Alibris President and CEO Martin Manley, who founded the business in 1998, said the sale to Oak Hill is a natural "ownership evolution."
Alibris, whose gross sales were up 20% to 30% to more than $70 million last year, isn't a start-up any more, Manley said. Being venture-backed at this point "is a little like living at home when you're 30 years old," he said.
Alibris needs a new partner with deep pockets and expertise to help it grow, Manley said. Oak Hill is funding the all-equity transaction with money from its $2.5 billion Oak Hill Capital Partners II LP, which closed in September, said Bill Pade, a partner with the firm.
Oak Hill has been looking to invest in a digital publishing interest for about two years now, seeing it as an area with lots of potential for growth. The firm connected with Alibris through industry contacts after another deal fell through, Pade said.
Under terms of the deal, which is expected to close in two weeks, Oak Hill is providing an undisclosed amount of working capital that Alibris will use to set up Web sites in Europe and Asia. The company also aims to expand its network of 8,000 booksellers with smaller publishers and also wants to get more music and movie dealers on board, Manley said. Alibris might also make add-on acquisitions.
The company connects libraries, independent book sellers and retail chains like Borders Inc. with people looking for out-of- print or hard-to-find books. Alibris gets a commission from each sale and charges fees to the sellers, who have accounts. Prices range for $2.95 for a dog-eared copy of J.D. Salinger's "Catcher In The Rye" to $199 for the latest edition of the "CRC Handbook of Chemistry and Physics," a college textbook.
Jefferies & Co. division [sic] Jefferies Broadview advised Alibris. Cooley Godward LLP was its legal counsel.