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Investment firm Blackstone announced on Wednesday that it was buying a majority stake in the direct-to-consumer genetics company Ancestry from its former equity holders for $4.7 billion.

The firm will take the reins from global firms including Silver Lake, GIC, and Spectrum Equity, but GIC will retain a significant minority stake in the company, according to a press release. Ancestry was last valued at roughly $3 billion in 2017, according to PitchBook, and had eyed an IPO in 2017 and 2019, when the personal genetics business was booming.

But slumping sales have forced difficulties for consumer genetics businesses like Ancestry and its major competitor, 23andMe, in recent years, suggesting a challenging road ahead. This February, Ancestry laid off 6% of its staff, or about 100 people, citing slowdowns in demand. The previous month, 23andMe laid off a similar number of workers, or about 14% of its staff. Earlier this week, 23andMe launched a subscription service called 23andMe Premium that costs members $10 per month or $79 per year for access to what it is billing as exclusive health reports based on the latest research.

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“The business landscape fell off a cliff last year,” said Laura Hercher, director of human genetics research at Sarah Lawrence College. “Fads pass.”

In response to the slump, Ancestry has rolled out a series of new products aimed at strengthening its offerings in the health arena, similar to the services 23andMe provides. But unlike 23andMe, Ancestry has not yet managed to concretely link its wealth of genetic information to health outcomes, stopping it from providing the kinds of data consumers or researchers would pay for.

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Ancestry has “this enormous database which inherently has a lot of value hidden in it — potential energy,” said Hercher. “But they have not figured out how to get that information out in the way 23andMe has.”

Ancestry’s deal with Blackstone appears geared toward doing just that — as well as expanding Ancestry’s appeal in international markets. The company, which operates in more than 30 countries and is the largest consumer DNA database in the world, said it is generating revenues of $1 billion a year.

“Looking ahead, in collaboration with Blackstone, we will continue to leverage our unique content, powerhouse consumer brand and technology platform to expand our global Family History business while bringing to life our long-term vision of personalized preventive health,” Ancestry CEO Margo Georgiadis said in a release.

As of November 2018, Ancestry claimed to have sold 18 million DNA kits and provided access to an estimated 10 billion historical records. The company also said its ancestry subscription service has 3 million paying customers; those services cost $25 to $50 per month or $100 to $200 every six months.

“We believe Ancestry has significant runway for further growth as people of all ages and backgrounds become increasingly interested in learning more about their family histories and themselves,” David Kestnbaum, senior managing director at Blackstone, said in the release.

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