Zoopla snaps up price comparison website uSwitch in £190m deal
ZOOPLA has bought price comparison website uSwitch for up to £190m as the property portal seeks to expand its reach into other household consumer services.
Shares in the company rocketed 16.4 per cent yesterday as Zoopla announced it will pay £160m plus a performance-based fee of up to £30m for uSwitch’s parent company Ulysses Enterprises, which is owned by Lloyds Development Capital (LDC).
Alex Chesterman, Zoopla’s founder and chief executive, said the deal fitted in with its strategy of becoming “the market-leading resource for consumers”, creating single destination for property-related services.
“We have always been at the forefront of innovation in our industry and this deal brings together two of UK’s best known and fastest growing digital brands as a natural next step towards creating the ultimate platform where consumers can research, find and manage their home,” Chesterman said.
Founded in 2000, uSwitch receives about 50m visits a year from consumers looking to move to a better tariffs for gas and electricity supply, as well as phone and broadband service. It generated £62.9m revenues last year and adjusted earnings of £16.2m.
The deal comes just months after an online portal backed by estate agents, OnTheMarket, shook up the market by effectively banning agents from advertising properties with more than one rival website.
Agents signed up to OnTheMarket must choose between Zoopla and market leader Rightmove.
Chesterman said Zoopla had lost about 4,000 agents because of the rival’s policy, but he continued to downplay its long-term impact.
“We think that competitive threat is getting weaker by the minute,” he said. “Many dozens [of agents] are already coming back.”
Zoopla said uSwitch will continue to run as a standalone website and the management team will remain with the business including chief executive Steve Weller. The acquisition is expected to complete by end of June 2015, subject to shareholder approval.
Daily Mail and General Trust (DMGT), Zoopla’s largest shareholder with close to a 32 per cent stake, has agreed to back the deal and vote in favour of the move, the company said.
Analysts at Canaccord Genuity said: “This is an excellent acquisition for Zoopla that will differentiate it further from other property portals. We expect it to transform the business into the UK’s one-stop shop for customers researching, finding, and managing property.”
BEHIND THE DEAL
DARREN REDMAYNE – LINCOLN INTERNATIONAL
1 Darren Redmayne is chief executive of Lincoln International’s UK business after joining the group and founding its London office in 2008.
2 He also heads up Lincoln’s international pensions advisory business, advising clients including Asda, Hansen, JPMorgan, Trinity Mirror and Xerox.
3 Redmayne was a child actor starring in “My Family and Other Animals” the 1987 drama based on author Gerald Durrell’s autobiographical work about his childhood on the island of Corfu.
Also advising…
Lincoln International acted as the financial adviser to uSwitch’s owner LDC while Torch Partners advised Zoopla Property Group on the acquisition. Jefferies acted as sponsor and financial adviser.