ZPG PLC Regulatory News (ZPG)

29 November 2017

ZPG Plc

ZPG TO ACQUIRE CALCASA

Strategic highlights

● Calcasa is the leading provider of residential property market analysis in Netherlands

● Combination creates the largest residential property valuation database in Europe

● Builds on Hometrack's leading position in UK & Australia as international platform

● Brings together two of best European modelling teams and property data solutions

● Further enhances ZPG's data expertise, product capabilities & partner relationships

● Subscription model with strong record of sustained revenue growth and profitability

● Expected to be earnings & margin enhancing on an adjusted basis in first full year1

ZPG Plc (LSE:ZPG) ("ZPG" or the "Company"), which owns and operates some of the UK's most trusted property and household-related digital brands, today announces that it has agreed to acquire Calcasa ("Calcasa"), the leading provider of automated property valuations and statistical market analysis in the Netherlands, for €30.0 million (£26.5 million2) on a cash-free, debt-free basis, with a performance-based earn-out of up to €50.0 million (£44.2 million2) (the "Acquisition"). Completion of the Acquisition is expected to take place on 1 December 2017.

Established in 2005, Calcasa is the leading automated valuation model ("AVM") and residential property market insights provider in the Netherlands. With the largest property database of over 10 million unique price points Calcasa provides property valuation and risk analysis to over 100 key stakeholders in the Dutch housing market including mortgage lenders, brokers, investors, surveyors, estate agents, developers, validation institutes, housing corporations, pension funds, government agencies, regulatory institutions, research companies and real estate funds.

The acquisition of Calcasa by ZPG creates the largest residential property valuation database in Europe and builds on Hometrack's leading position in the UK & Australia as an international property data platform. The combination brings together two of the best European modelling teams and property data solutions, creating significant opportunities by further enhancing our data expertise, product capabilities and partner relationships.

Calcasa's market-leading AVM is deeply integrated into the valuation processes of the Netherland's top 10 lenders and has a 10+ year track record in the Dutch mortgage and real estate markets. Its best-in-class AVM has been analysed by the ECB, Dutch Central Bank and the major ratings agencies and its quarterly House Price Index is a trusted publication on the state of affairs in the Dutch property market that receives national and local media coverage.

Calcasa has a strong financial track record with a subscription revenue model underpinned by long term contracts with over 70% recurring revenues. The transaction is expected to be earnings & margin enhancing on an adjusted basis in the first full year1.

Calcasa has a world-class academic team of 15 based in Delft, Netherlands and following completion Calcasa will continue to operate as a standalone brand and platform led by its founders Evert Van de Wauwer and Bas Meeuwissen, who will be remaining with the business.

Transaction highlights

● Initial consideration of €30.0m (£26.5 million2) on completion on a cash-free, debt-free basis

● Performance-based earn-out of up to €50.0 million (£44.2 million2) over the next three years

● Total consideration represents a maximum multiple of 10x FY17-FY20 Net Profit for Calcasa

● Acquisition expected to be earnings & margin enhancing on adjusted basis in first full year1

● Transaction to be funded through Company's cash and extension of existing credit facilities

● Planned opening net debt ratio of c.2.9 the enlarged Company's EBITDA on completion

● Transaction costs of c.£0.3m in FY18 and acquired amortisation charge of c.£2.5m pa

● Calcasa generated €5.0m (£4.4 million2) profit before tax in the year to 31 December 2016

● The value of Calcasa's gross assets was £5.5m as at 31 December 2016

Commenting on today's announcement Alex Chesterman, Founder & CEO of ZPG said, "We are delighted to announce the acquisition of Calcasa. The combination of Hometrack and Calcasa will give us unrivalled capabilities as an international property data platform and there is a clear opportunity to leverage our complementary products and relationships.

"This is another example of a transaction that fits perfectly with our strategy. Calcasa is a market leading business that we know well with strong underlying growth and which we believe will be even stronger under our ownership. And we are buying the business at a price that is accretive to our shareholders. We look forward to welcoming Evert and his team to the ZPG family."

Commenting on the Acquisition, Evert Van de Wauwer, CEO of Calcasa said, "We are very excited to become part of the wider ZPG business. We know the Hometrack team well and our combined data and enhanced products and services will deliver even more value to our partners. We are looking forward to helping to build on ZPG's data capabilities and further develop its international presence as the market leader for residential property data analytics."

This announcement contains inside information.

-ENDS-

For further information, please contact:Lawrence Hall, Head of Communications - lawrence.hall@zpg.co.uk / 07890 078 945Rachael Malcolm, Head of Investor Relations - rachael.malcolm@zpg.co.uk / 0203 8725 648Jais Mehaji / James Isola, Maitland 020 7379 5151

1 Adjusted is defined as operating profit after adding back depreciation and amortisation, share-based payments and exceptional items including deal-related costs

2 Exchange rate of GBP/EUR = 1.13

About ZPG Plc (www.zpg.co.uk)

ZPG Plc (LSE:ZPG) ("ZPG") owns and operates some of the UK's most trusted digital brands that help empower smarter property and household decisions including Zoopla, uSwitch, Money, PrimeLocation and SmartNewHomes. We are also one of the leading residential property data and software providers with a range of products including Hometrack, TechnicWeb, Ravensworth, Alto, Jupix, ExpertAgent, PropertyFile and MoveIT. Our websites and apps attract over 50 million visits per month and over 25,000 business partners use our services. ZPG was founded in 2007 and has a highly experienced management team, led by Founder & CEO, Alex Chesterman OBE.

Zoopla is the UK's most comprehensive property website, helping consumers 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 for home services switching, helping consumers to find the best deal and save money on their gas, electricity, broadband, TV, phone and other products.

Money is one of the UK's leading financial services comparison websites, helping consumers compare products including mortgages, loans, credit cards, bank accounts and insurance from more than 600 providers.

PrimeLocation is one of the UK's leading property websites, helping house-hunters in the middle/upper tiers of the market find their dream home from the top estate agents, letting agents and property developers.

SmartNewHomes is the UK's leading website dedicated exclusively to new homes, helping buyers understand the market and search for new build homes from all the leading property developers across the country.  

Hometrack is a leading supplier of automated property valuations and property market insights in the UK and Australia to partners including mortgage lenders, developers, investors, housing associations and others.

TechnicWeb is the UK's leading estate agency website design and hosting business specialising in designing and operating fully-responsive websites for the property sector.

Ravensworth is the UK's leading provider of print solutions to estate agents and offers a comprehensive range of products and services for every stage of the property marketing journey from listing through to post-sale.

Alto, Jupix and ExpertAgent are some of the leading cloud-based estate agency and property management software systems used by thousands of property professionals across the UK for the day-to-day management of inventory, marketing and communications.

PropertyFile and MoveIT are innovative tools used by estate agents to improve communication and efficiency with their customers and to allow them to generate additional revenue streams via referrals. 

About Calcasa (www.calcasa.co.uk/)

Calcasa is the leading provider of automated property valuations and statistical market analysis in the Netherlands. The Calcasa Automated Valuation Model (AVM) for valuation of individual homes is unique due to its high coverage and accuracy. It is internationally recognized by the three major rating agencies and regulators. Mortgage lenders, investors, intermediaries, validation institutes, housing corporations, consumer organizations, real estate companies, broker organizations, government agencies and regulators rely daily on the solutions Calcasa provide.