SALT LAKE CITY — In a surprise move, Lehi-based Ancestry.com made a double-pronged announcement Tuesday that longtime CEO Tim Sullivan is on his way out and the company will delay a much-anticipated public stock offering.
Sullivan will step down Oct. 1 and transition to chairman of the company's board of directors, the online family history network said in a news release.
Ancestry.com announced in June that its initial public offering was expected to come together before the end of the year.
Sullivan had led the company for more than a decade and helped oversee a surge in annual revenues from $140 million when he took over the top post to an expected $1 billion in 2017, according to the news release.
"The last 12 years at Ancestry have been a joy for me, but I believe it's the perfect time to find the right person to lead the company going forward,” he said. “We’ve assembled a world-class management team, have an exciting strategic roadmap and see tremendous potential ahead. I’m also pleased to pass the baton when our company’s performance is so strong. "
Howard Hochhauser, Ancestry's chief financial and operations officer, will assume the role of interim CEO while the company conducts "a thorough external search for CEO candidates," according to the release.
Mike Bingle, a member of Ancestry's board of directors and the managing partner at Silver Lake, which along with Singapore's Government Investment Corp. assumed a minority stake in the company in 2016, lauded Sullivan's leadership in a statement Tuesday.
"I want to thank Tim for his leadership over the last 12 years and for his future contributions to the company,” Bingle said. “The company has a strong management team in place, enabling Howard to step forward and ensure that Ancestry continues to advance its strategic vision while we conduct a thorough search for the next CEO.”
What does it mean? Sid Krommenhoek is a veteran tech entrepreneur and managing partner at Provo-based venture capital firm Peak Ventures. He noted that leadership changes ahead of a public stock offering are not altogether unusual and shouldn't automatically be assumed as a negative indicator.
"It's sometimes the case that an executive's personal career arc may not align with a company's vision of their own arc of progress," Krommenhoek said. "What's happening at Ancestry right now could simply be a matter of the two paths no longer aligning."
Krommenhoek, whose firm works with many rising, local tech entrepreneurs, said Ancestry's high level of success — and a likely future IPO — bode very well for the bigger Beehive State technology and innovation sector.
"Including Ancestry, we could be seeing four big Utah IPO's in the next 12 months," he said. "When you have that much value, both in capital and talent, that has built up and grown and is effectively released through public markets, it's a very positive thing.
"Some of this talent will move on to go found other companies and add to the tech ecosystem in Utah."
For Ancestry, which did not cancel its IPO plans but described them as "postponed," it would be the second time around for offering public stock. In 2009, the company dove into the open markets but was acquired by a private equity group, led by London-based Permira Advisors LLC, in 2012 for $1.6 billion.
A Reuters report in June revealed that the company had submitted a draft registration statement on a proposed IPO to the U.S. Securities and Exchange Commission. And Bloomberg reported in July that Ancestry was close to hiring banks to oversee the deal, which could have valued the company at $3 billion.
Founded in 1983, Ancestry.com has grown into a global leader in family history services and, more recently, consumer genomics.