LONDON (Alliance News) - Zoopla Property Group PLC on Tuesday said it has agreed to buy residential property market insight provider Hometrack.co.uk Ltd, in a deal to be partly funded through a placing of up to 5.0% of Zoopla's issued share capital.
The FTSE 250 property portal said it has agreed to buy Hometrack for GBP120.0 million on a cash-free, debt-free basis, under its strategy to develop its data services business.
For the year ended June 30, Hometrack generated revenue of GBP15.5 million and adjusted earnings before interest, tax, depreciation and amortisation of GBP7.1 million. Zoopla said the purchase is expected to be earnings and margin enhancing on an adjusted basis in the first full year.
The acquisition is to be financed through a combination of existing cash resources, a new GBP75.0 million term loan and a placing of up to 5.0% of Zoopla's issued share capital, equal to around 20.9 million shares.
Zoopla did not say at what price the share would be placed, but at the closing share price on Tuesday, the placing would raise up to GBP41.2 million.
Shares in Zoopla closed up 197.00 pence on Tuesday.
The placing is being conducted through an accelerated bookbuild process, which was launched immediately on Tuesday afternoon.
Credit Suisse Securities (Europe) Ltd and Jefferies International Ltd are acting as joint global co-ordinators and joint bookrunners in connection with the placing.
Around GBP108.0 million of the GBP120.0 million purchase price will be paid as an initial consideration with GBP12.0 million deferred and payable in two equal tranches on each the first and second anniversary following completion. A potential further earnout of up to GBP25.0 million is also payable, contingent on performance of certain future contracts.
The acquisition is expected to complete on Friday.
Zoopla on Tuesday said it is currently in talks on a potential further smaller acquisition, which "would be complementary" to the group and which is expected to complete within the next few months.
Talks relating to this other acquisition are ongoing, Zoopla said.
Meanwhile, the property portal said it is "pleased" with current trading across both its divisions, Property Services and Comparison Services.
The number of UK agency partners in its Property Services unit has continued to grow since the end of its financial year on September 30, and the Comparison Services unit continues to "enjoy solid switching volumes across each of its verticals".
"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 Zoopla Founder and Chief Executive Alex Chesterman.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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