(Alliance News) - CoStar Group Inc on Tuesday fired a warning shot to UK online property website, Rightmove PLC, after announcing the acquisition of OnTheMarket PLC had been completed.
The agreement to buy OnTheMarket was completed after the scheme by which the deal was to be facilitated became effective.
In October, CoStar, the Washington, DC-based online real estate marketplace, information and analytics provider in the commercial and residential property sector agreed to buy OnTheMarket in a GBP99 million deal.
The agreement was worth 110 pence for each OnTheMarket share.
CoStar said the acquisition will combine the financial strength, online marketplace experience, and technology of CoStar Group with OnTheMarket's large network of agents to create a genuine disruptor to the established UK market leaders.
Andy Florance, founder and chief executive officer of CoStar, was quick to send a clear message to industry rival, Rightmove.
"The current market leader has grown complacent focusing on margin over innovation, and pricing ahead of value," he said.
CoStar Group said it plans to invest GBP46.5 million into sales and marketing in the first full year following the commencement of the integration, six times the current annual media spend and more than three times the current annual media spend of Rightmove.
The initial planned investment will mark the first stage of a multi-year investment programme totalling hundreds of millions of pounds to drive more consumers to the OnTheMarket portal with the goal of significantly increasing the quantity of valuable leads to OnTheMarket's agent clients.
Shares in OnTheMarket were unchanged at 109 pence, while shares in CoStar fell marginally to USD83.97 in New York on Tuesday.
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Rightmove (RMV)