19 Apr 2016 07:04
ZOOPLA PROPERTY GROUP PLC TO ACQUIRE THE PROPERTY SOFTWARE GROUP
Providing integrated solutions and new revenue opportunities for UK property professionals
· PSG is the UK's leading provider of property software solutions used in over 8,000 UK agency branches
· Enables ZPG to provide the UK property industry's first end-to-end solution for property professionals
· Expected to be earnings enhancing on an adjusted basis in the first full financial year following completion
Zoopla Property Group Plc (LSE: ZPLA) ("ZPG" or "the Group"), the digital media and lead generation platform that owns and operates some of the UK's leading online consumer brands including Zoopla, uSwitch and PrimeLocation today announces that it has conditionally agreed to acquire Property Software Holdings Limited (together with its subsidiaries "The Property Software Group" or "PSG") for £75m on a cash-free, debt-free basis (the "Acquisition").
Established in 2007, PSG is the UK's market-leading provider of software solutions to property professionals, used in over 8,000 agency branches. PSG provides workflow tools to over 40,000 estate and lettings agents across the UK through its innovative cloud-based (Alto, Jupix) and desktop (Vebra, Core, CFP) software products and provides essential systems for the day-to-day management of inventory, marketing and communications as well as diary management, chain progression, business reporting tools and financial processes.
In addition to its market-leading software products, PSG's newest products, MyPropertyFile and MoveIT, provide agents with digital platforms for engaging more effectively with their clients and generating additional revenue streams from a variety of property-related services.
In the year ended 31 March 2016, PSG generated revenues of c.£15.9m and Adjusted EBITDA1 of c.£5.1m, with 84% recurring revenues and a customer retention rate of over 97%.
The acquisition of PSG is a core part of ZPG's continued mission to be the most effective partner for UK property professionals and will enable the enlarged Group to offer agents the UK property industry's first end-to-end solution including software and CRM, digital marketing and market insight tools and further revenue opportunities.
PSG has an impressive financial track record, a strong management team with deep software and property market expertise, a market-leading product proposition and significant growth opportunities both in its core software business and its new products. Post completion, PSG will continue to operate as a standalone platform and brand with business as usual and the PSG team becoming an integral part of the wider Group. Mark Goddard, CEO of PSG, will become Managing Director of the Group's Property Services division, reporting to ZPG Founder & CEO, Alex Chesterman.
Transaction highlights
· The Group expects the Acquisition to be earnings enhancing to Adjusted EBITDA and Adjusted Basic EPS in the first full financial year following completion
· Consideration of £75m on a cash-free, debt-free basis payable in cash with £47m payable on completion, £22m payable 6 months after completion and £3m payable each of 12 and 24 months after completion
· The transaction will be funded from the Group's existing cash and a £50m extension of the current debt facility it has secured from its existing lenders
· Strong deleveraging profile due to cash generated by the combined Group with opening net debt ratio of c.2.2x the combined Group's EBITDA
· The Group will maintain its current dividend policy of 35%-45% payout ratio of the combined Group profits
· The value of PSG's gross assets was £28.2m as at 31 March 2015
· Completion is conditional upon either the cancellation of PSG's existing FCA Consumer Credit License or FCA approval of the change of control of PSG, whichever is the earlier
· The transaction provides an exit for PSG's institutional backers, LDC, the private equity arm of Lloyds Banking Group, which originally invested in the business in December 2013 along with certain members of the management team including Mark Goddard, Eduardo Mardell and James Toogood
Current trading
The Board is pleased with current trading, especially the strong performance in the Comparison Services division as a result of energy supplier price cuts driving significant switching volumes. The Group now expects full year 2016 results to towards the higher end of market expectations. The Group will publish its half year results on 25th May.
Alex Chesterman, Founder & CEO of Zoopla Property Group Plc said, "This acquisition is a game-changer, combining ZPG's best-in-class property marketing solutions with PSG's best-in-class property workflow solutions, and will transform the services available for both UK agents and consumers.
"We will be able to offer UK property professionals an unrivalled proposition supporting them with their software and CRM solutions, digital marketing requirements, market insight tools along with providing them a range of new revenue opportunities through PSG's MoveIT platform.
"Our ambition has always been to be the most effective partner to the UK property industry and this deal will allow us to work more closely with our agent partners and offer them an even more compelling service. I look forward to welcoming Mark and his team to the ZPG family."
Mark Goddard, CEO of The Property Software Group added, "I am very proud of what we have achieved over the last 9 years but it is just the start. We've had a long-standing relationship with the team at ZPG and are incredibly excited to continue our journey as part of their growth and innovation story. We are very much looking forward to continuing to develop unmatched software tools and innovative products and to delivering even better value to our clients."
-Ends-
A conference call with online presentation for analysts and investors will take place at 8.30am. Dial-in details as follows:
PIN: 33136191#
UK Toll Number: 020 3139 4830
UK Toll-Free Number: 08082 370 030
United States Toll-Free Number: 1866 928 7517
United States Toll Number: 1 718 873 9077
To register for the slide webcast, please go to:
https://arkadin-event.webex.com/arkadin-event/onstage/g.php?d=703507180&t=a
Event Passcode: 670250
For further information, please contact:
Zoopla Property Group Plc
Lawrence Hall, Head of Communications - lawrence.hall@zpg.co.uk / 07890 078 945
Rachael Malcolm, Head of Investor Relations - rachael.malcolm@zpg.co.uk / 07774 671 082
Maitland
James Isola 020 7379 5151
Notes to Editors
About The Property Software Group
The Property Software Group (PSG) is the UK's largest supplier of software and workflow solutions to the property industry. Its portfolio includes market leading residential sales and property management software and innovative software features.
PSG provides essential systems for the day-to-day management of inventory, marketing and communications as well as diary management, chain progression, business reporting tools and financial processes. And its newest products, MyPropertyFile and MoveIT, provide agents with digital platforms for engaging more effectively with their clients and generating additional revenues from a variety of property-related services.
PSG's brand portfolio includes Alto, Jupix, CFP, Vebra, Core, Encore, MyPropertyFile and MoveIT.
About Zoopla Property Group (www.zpg.co.uk)
Zoopla Property Group Plc (LSE:ZPLA) (ZPG) is a digital media and lead generation platform that owns and operates some of the UK's most widely recognised and trusted digital consumer brands including Zoopla, uSwitch and PrimeLocation. Our mission is to be the most useful resource for consumers when finding, moving or managing their home and the most effective partner for related businesses.
We help consumers make smarter decisions and connect them to the most relevant business for their needs. Each of our brands has a distinct market position attracting a unique audience allowing us to deliver unrivalled exposure and leads for our partners. Our websites and mobile apps attract over 550 million visits per year and generate over four million leads per month for our partners.
Zoopla is the UK's most comprehensive property website, empowering consumers to make smarter property decisions, by helping them to research the market and find their next home by combining hundreds of thousands of property listings with market data and local information.
uSwitch is the UK's leading comparison website and lead generation engine for home services switching, helping consumers to find the best deal and save money on their gas, electricity, broadband, TV, phone and personal finance products. In 2015, uSwitch saved UK consumers over £165m on their energy bills alone.
PrimeLocation is one of the UK's leading property websites, helping house-hunters in the middle and upper tiers of the market explore and find their dream home from the top estate and letting agents.
Zoopla Property Group Plc was founded in 2007 and has a highly-experienced management team, led by Founder & CEO, Alex Chesterman.
1 *After adjusting for c.£1.2m of costs relating to product and platform development, advisory services, Chairman's remuneration and exceptional items relating to restructuring.