Zoopla to buy house price valuer Hometrack for 120M to beef up its data services
UK property listings site Zoopla is splashing out 120 million in cash (~$150M) on a big purchase of its own announcing its intention toacquire real estate analytics firm Hometrack as it looks to expand its data and analytics services.
In a press release today,Zoopla saidHometrack willhelp itstrengthenits property services for consumers and expand its b2b play.Its slating several new consumer and b2b products coming this year.
The deal will allow us to serve our consumers and partners even more effectively and gives us unrivalled data capabilities in the residential property market. Hometrack is a perfect fit to develop our data services business, said Alex Chesterman, founder and CEO of Zoopla, in a statement.
Currently Zooplaswebsite offers details of average house prices for different UK regions based on its own estimates so is presumably looking to enhance those estimates withHometracks house price index data.
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Hometrack, which was founded in the UK back in 1999, sells house price valuation services to mortgage lenders in Europe and Australia. According to the companys websiteitsautomated valuation model (AVM) is used by16 of the top 20 UK mortgage lenders, with the tech being used to generatemore than20M property valuations per year.It also makes the AVM available as an API.
It has more than 400 customers for its various property market analytics services which, besides mortgage lenders, includesnew home developers, investors, housing associations and local authorities.
Zoopla said it intends tocontinue operating theHometrack brand and platform as a standalone after the close of the acquisition expected Friday withthe latters 55-strong team intended to formwhat it describes as the cornerstone of its data services business, led by Hometrack CEO Charlie Bryant.
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On the financial side, Hometrack reportedrevenue CAGR of around 15 per cent from full year 2013to FY16,and generated revenues of 15.5M and adjusted EBITDA of 7.1M in the year to 30 June, 2016. And Zoopla notes that more than 70 per cent of Hometracksrevenues are subscription-based and in its words underpinned by long-term relationships. So its spying a reliablerevenue pipe here.
Indeed, it says it expectsthe acquisition to be earnings and margin enhancing on an adjusted basis in first full year.
In terms of the structure of the transaction, 108M will be due oncompletion, with a further 6M payable on each of the first and second anniversaries of the deal.
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Zoopla says the acquisition willbe financed through a combination of existing cash resources, a new 75Mterm loan and an equity placing of up to 5 per cent of itsordinary issued share capital.
The companyalready owns price comparison site uSwitch, and picked up another data supplier site, UpMyStreet, back in 2012. It has also spent money buying up various other local property site rivals, such as Prime Location.
The 2007-founded UK startup raised close to$26M in VC funding, according to Crunchbase,andIPOed in 2014.
Today Zoopla also noted it isin negotiationson another smaller, complementaryacquisition although it told investorsdiscussions on that front remain ongoing.