Property portal Zoopla buys price comparison site uSwitch
LONDON (Reuters) - British property search website Zoopla said it was buying price comparison service uSwitch for 160 million pounds ($247 million) to offer home energy deals to customers that visit its websites and mobile apps.
Shares in Zoopla raced to a six-month high and were trading up 14 percent at 210 pence at 0901 GMT as analysts said it was a sensible deal at a good price.
"It's a good fit with the existing Zoopla business, with the aim of creating a single resource where consumers can research, find and manage their home", analysts at Numis said.
Alex Chesterman, Zoopla's founder and chief executive, said the deal bought together two of Britain's fastest-growing digital brands in home services.
"Now consumers will be able to use us to cut their energy deals, get a better broadband deal, find better home insurance and much more," Chesterman said on Thursday.
Founded in 2000, uSwitch receives about 50 million visits a year from consumers looking to move to a better tariffs for gas and electricity supply, as well as phone and broadband services.
The company, known as Ulysses Enterprises Limited and owned by Lloyds Development Capital (LDC), Forward Internet Group and uSwitch management, posted core earnings of 16.2 million pounds on revenue of 62.9 million pounds in 2014.
LDC said it would make a return of 2.4 times its original investment when it backed a management buyout in August 2013.
Chesterman said Daily Mail and General Trust , Zoopla's largest shareholder with a 32 percent stake, supported the deal. Zoopla will pay an additional 30 pounds if uSwitch meets performance targets.
Zoopla, which also owns the PrimeLocation portal, is diversifying just months after a new property portal backed by estate agents, OnTheMarket, disrupted a market that Zoopla and rival Rightmove largely had to themselves.
Chesterman said Zoopla had lost about 4,000 agents, OnTheMarket requires its agents to use only one other portal, but he continued to downplay its long-term impact.
"We think that competitive threat is getting weaker by the minute," he said. "Many dozens (of agents) are already coming back."
He said Zoopla expected to report revenue of more than 41 million pounds, and adjusted core earnings of about 21 million pounds for the six months to the end of March, a period in which its websites and mobile apps received 266 million visits.
(Reporting by Paul Sandle; Editing by David Holmes and David Clarke)
