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First off, let me point out that the acquisition of Bankrate (NYSE:RATE) was on my list of 12 2009 Predictions and I previously called for an acquisition in my write-up Final Option for Bankrate: Find a Buyer.

Consensus was estimating $55 million in EBITDA for Bankrate in 2009 but management stated that they would likely miss that estimate. RATE reported $22.5 million in EBITDA in the first half of 2009. I assume they could match that run rate and produce $45 million in EBITDA for the full year 2009. Assuming that EBITDA figure, the acquisition multiple is 12.7x.

I looked back at my notes and saw that Internet acquisitions over the past few years were consummated at a mean 20x EBITDA multiple. However, given the depressed economic environment and RATE’s current challenges, a discount to that mean multiple is warranted.

I think a 14x multiple would properly reflect the current challenges but that branded online advertising could rebound in 2010.

Bottom line, I think the Apax offer is too low. A 14x multiple would value the shares at $31.50.

If Apax doesn’t raise the offer, then another acquirer should step in, particularly as Amazon (NASDAQ:AMZN) just paid close to $1 billion, mostly in stock, to acquire Zappos.

Possible acquirers can include IAC (NASDAQ:IACI), Yahoo (NASDAQ:YHOO), and Microsoft (NASDAQ:MSFT) or maybe another private equity firm will see more value in owning RATE.

Source: Arbs Are at Play with Bankrate – Higher Price Likely