Zoopla zooms higher on uSwitch acquisition

30th Apr 2015 08:22

Zoopla, the residential property website group, has agreed to acquire utility price comparison site uSwitch for up to £190m.Zoopla, which is 31.8%-owned by the Daily Mail and General Trust (DMGT), said the purchase would create the "ultimate online property resource" with the purchase of uSwitch owner Ulysses Enterprises from Lloyds Bank's private equity arm Lloyds Development Capital and Forward Internet Group (FIG).The deal is for an initial £160m on a cash-free, debt-free enterprise value basis, plus a performance-based earn-out of up to £30m.Zoopla said it expected the deal to be "significantly enhancing" to adjusted basic earnings per share in the first full financial year following completion.The uSwitch website made revenues of £62.9m and adjusted operating profits of £16.2m last year from helping consumers compare rates on gas, electricity, home phone, broadband, credit cards, and secured and unsecured personal loans.The site was founded in 2001 by George Mountbatten, the fourth Marquess of Milford Haven, who then sold it to US media group EW Scripps for £210m in 2006, which then sold it to FIG in 2009."The acquisition of uSwitch is a significant step in ZPG's mission to be the most useful resource for consumers and the most effective marketing partner for professionals across the property space," Zoopla said."The transaction brings together two of the UK's best-known digital consumer brands and fastest-growing technology businesses of the past few years."Broker Westhouse pointed out that this development would make Zoopla "become a reenergised and more credible competitor" to listed rival Moneysupermarket.com.Zoopla will partly find the acquisition with existing cash resources, with the remainder funded by a new five-year £150m credit facility, of which circa £125m will be drawn down at completion."The combined group will maintain ZPG's current dividend policy of 35-45% payout ratio of the combined group profits," it added.