Terms of the deal, which had long been rumored, call for London's Permira to pay $32 a share for the family history website, a premium of 10% over the company's Friday close.

Permira's offer is 41% above the closing price on June 5, the day before Ancestry.com said it had hired Frank Quattrone's Qatalyst Partners LLC to explore options.

In 2003, according to the source, Menlo Park, Calif.-based Spectrum sank $13 million into Generations Network Inc., as the target was then known. Four years later, it led a group that bought Generations for $354 million, injecting an additional $100 million and rolling over its existing equity. Spectrum's ownership rose to 67%.

The private equity firm raked off a total of $360.2 million in cash in a string of share sales starting with Ancestry.com's November 2009 initial public offering, priced at $13.50 a share.

The deal with Permira values Spectrum's remaining 13.63 million shares at $424.4 million. All told, its $113 million outlay has yielded a $672 million, or 594% profit.

Provo, Utah-based Ancestry.com bills itself as the world's largest depository of online family history data. The company's websites house a combined 10 billion digitalized, indexed records accessed by more than 2 million paid subscribers.

Since Spectrum's 2007 purchase, the subscriber roster has more than doubled, while Ebitda has jumped from $43 million to $155.3 million in the 12 months ended June 30.

Ancestry.com said in an 8-K filing that Permira and its affiliates have committed up to $503 million of equity funding to the buyout. The $1.6 billion price equates to 10.2 times trailing Ebitda.

Spectrum will roll about $100 million worth of its equity, or 24% of its holding, into the deal. Ancestry.com CEO Tim Sullivan and other executives will kick in equity as well.

Sullivan, who will remain as CEO post-deal, in a statement called the sale "a successful outcome for our public stockholders and a great day for Ancestry.com employees and subscribers," adding that the deal would help fuel growth at Ancestry.com.

After the sale, the company said it intends to continue its current growth strategy, including developing new content, such as DNA data. Ancestry.com has done two deals this year, buying Archives.com Inc. for $100 million and 100memories Inc. for an undisclosed sum.

Brian Ruder, a Permira partner who runs the firm's Menlo Park office, in a statement said, "We are thrilled to be able to back the company as it continues to develop new and innovative content, and expand in both its core markets and into new geographies."

Ancestry.com was advised by its general counsel William Stern, Qatalyst and a team from Wachtell, Lipton, Rosen & Katz led by Andrew J. Nussbaum, Adam J. Shapiro, Jodi J. Schwartz and Lori S. Sherman. Permira received advice from Morgan Stanley, Robert Schwenkel and Brian Mangino at Fried, Frank, Harris, Shriver & Jacobson LLP and Clifford Chance LLP, with McKinsey & Co., Aon M&A Solutions, and PricewaterhouseCoopers LLP assisting.

Kirkland & Ellis LLP's Jeffrey D. Symons and David A. Breach advised Spectrum.

A group of banks including Barclays plc, Credit Suisse Securities, Deutsche Bank AG, Morgan Stanley and RBC Capital Markets LLC have agreed to provide financing to Permira for the deal.

Spectrum officials did not respond to requests for comment.