TIDMZPLA TIDMTTM
RNS Number : 6433V
Zoopla Property Group PLC
31 January 2017
31 January 2017
Zoopla Property Group Plc
ZOOPLA PROPERTY GROUP TO ACQUIRE HOMETRACK FOR GBP120
MILLION
Strategic highlights
-- Hometrack is the UK's leading provider of residential property market insights
-- Combination creates the UK's most valuable residential property resource
-- Core part of ZPG's stated strategy to develop its data services business
-- Empowers consumers with even more useful, accurate market information
-- Provides partners with market-leading valuation tools and data intelligence
-- Strong position in Australian market with significant growth opportunities
-- Subscription model with strong track record of revenue growth & profitability
-- Clear synergies to accelerate and broaden ZPG's data services opportunities
-- Expected to be earnings & margin enhancing on an adjusted basis in first full year(1)
Zoopla Property Group Plc (LSE:ZPLA) ("ZPG" or the "Company"),
owner of some of the UK's most trusted digital platforms including
Zoopla, uSwitch, PrimeLocation and Property Software Group, today
announces that it has agreed to acquire Hometrack.co.uk Limited
("Hometrack"), the UK's leading provider of residential property
market insights and analytics, for GBP120 million on a cash-free,
debt-free basis (the "Acquisition").
Established in 1999, Hometrack is the UK's #1 automated
valuation model ("AVM") provider and one of the leading AVM
providers in Australia, generating over 20 million automated
property valuations per annum. Hometrack provides residential
property market insights, analytics, valuations and data services
to over 400 partners including mortgage lenders, new home
developers, investors, housing associations and local
authorities.
Hometrack has an impressive financial track record with revenue
CAGR of c.15% from FY13-FY16 and generated revenues of GBP15.5
million and adjusted EBITDA of GBP7.1 million in the year to 30
June 2016. The business provides its market-leading products to 15
of the top 20 mortgage lenders in the UK as well as all 4 leading
Australian mortgage lenders and its UK AVM is recognised by all the
major ratings agencies. Over 70% of Hometrack's revenues are
subscription-based and underpinned by long-term relationships.
The acquisition of Hometrack is another important step in ZPG's
mission to provide the most useful resources to consumers when
finding, moving or managing their home and be the most effective
partner for related businesses. The combination brings together two
of the UK's leading residential property market insights and data
providers, creating the most valuable residential property resource
in the UK.
Hometrack has a strong management team with deep data, property
market and analytical expertise and has 55 staff operating out of
offices in London and Sydney. Following completion, Hometrack will
continue to operate as a standalone brand and platform with the
team forming the cornerstone of ZPG's data services business, which
will be headed up by Charlie Bryant, CEO of Hometrack.
Transaction highlights
-- Consideration of GBP120 million on a cash-free, debt-free
basis with GBP108 million due on completion and GBP6 million
payable on each of the first and second anniversary following
completion(2)
-- The Company expects the Acquisition to be earnings and margin
enhancing on an adjusted basis in first full year(1)
-- Acquisition to be financed through a combination of existing
cash resources, a new GBP75 million term loan and an equity placing
of up to 5% of ZPG's ordinary issued share capital, which has been
separately announced today
-- Strong deleveraging profile due to cash generated by the
Company with opening net debt ratio of c.2.5x the enlarged
Company's adjusted EBITDA
-- The Company will maintain its current dividend policy of
35%-45% payout ratio of the enlarged Company's profit after tax
-- Represents a 14.7x multiple based on LTM to Dec-16 Adjusted EBITDA for Hometrack(3)
-- Increased interest charge of c.GBP2m p.a and additional
acquired amortisation charge currently estimated to be c.GBP9m
p.a
-- Hometrack deal-related exceptional costs of c.GBP7m in FY17,
c.GBP5m in FY18 and c.GBP2m in FY19(4)
-- The value of Hometrack's gross assets was GBP13.1m as at 30 June 2016
The Company is currently in negotiations on a potential further
smaller acquisition(5) , which would be complementary to ZPG, and
is expected to complete within the next few months. Discussions
relating to this potential acquisition are ongoing and there is no
guarantee that it will complete.
Outlook
The Board is pleased with current trading across both its
divisions. In the Property Services division, the number of UK
Agency partners has continued to grow since year end and the
Comparison Services division continues to enjoy solid switching
volumes across each of its verticals.
ZPG continues to invest in developing its integrated proposition
and Management look forward to the rollout of a number of new and
innovative products for both its consumers and partners during
2017. The Company's next scheduled update will be its half-year
results on 24 May 2017.
Commenting on today's announcement Alex Chesterman, Founder
& CEO of ZPG said, "We are delighted to announce the
acquisition of Hometrack, the clear market leader in AVM services
in the UK and a leading player in Australia. 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
and I look forward to welcoming Charlie and his team to the ZPG
family."
Commenting on the Acquisition, Charlie Bryant, Chief Executive
Officer of Hometrack said: "We have had a long-standing
relationship with ZPG and share the same vision of using data to
help our partners operate more effectively. My team and I are very
much looking forward to helping expand ZPG's data services
business, further growing the quality and breadth of the services
we offer to our partners and cementing ZPG as the market leader for
residential property market insights and analytics."
This announcement contains inside information.
-S-
For further information, please contact:
Lawrence Hall, Head of Communications - lawrence.hall@zpg.co.uk
/ 07890 078 945
Rachael Malcolm, Head of Investor Relations -
rachael.malcolm@zpg.co.uk / 0203 8725 648
Jais Mehaji / James Isola, Maitland 020 7379 5151
http://www.zpg.co.uk/
(1) Adjusted is defined as operating profit after adding back
depreciation and amortisation, share-based payments and exceptional
items including deal-related costs
(2) Potential further earnout of up to a maximum of GBP25m
payable over up to 10 years contingent on performance of certain
future contracts
(3) Hometrack generated c.GBP17.1m of revenues and c.GBP8.2m of
adjusted EBITDA in the 12-month period ending 31 Dec 16
(unaudited)
(4) Deal-related exceptional costs include transaction costs,
deferred consideration costs and performance bonus payable to
management sellers
(5) This potential acquisition is likely to be classed as an
Unclassified Transaction, according to the UKLA's Class Tests in
LR10 Annex 1
An investor and analyst call hosted by the ZPG management team
will take place at 09.00am tomorrow morning and dial in details are
as follows below:
UK Toll Number: 020 3003 2666
UK Toll-Free Number: 0808 109 0700
United States Toll-Free Number: 1866 966 5335
United States Toll Number: 1 646 843 4608
Participant pin: 7736784#
Password: 76156743
About Zoopla Property Group (www.zpg.co.uk)
Zoopla Property Group Plc (LSE:ZPLA) ("ZPG") owns and operates
some of the UK's most trusted home-related digital platforms
including Zoopla, uSwitch, PrimeLocation and Property Software
Group. Our mission is to provide the most useful resources for
consumers when finding, moving or managing their home and be the
most effective partner for related businesses.
We help consumers to understand the property and home services
comparison markets and make smarter decisions, whilst helping
professionals win more business and operate more effectively. Our
multi-brand, multi-channel approach creates a unique and unrivalled
proposition with our websites and mobile apps attracting over 50
million visits per month and over 23,000 businesses using our
services.
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 personal
finance products.
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.
Property Software Group is the UK's largest supplier of software
and workflow solutions to the property industry with a portfolio of
brands including Alto, Jupix, CFP, Vebra, Core, Encore,
MyPropertyFile and MoveIT.
ZPG was founded in 2007 and has a highly experienced management
team, led by Founder & CEO, Alex Chesterman OBE.
About Hometrack
Established in 1999, Hometrack is the UK's #1 automated
valuation model ("AVM") provider and one of the leading AVM
providers in Australia, generating over 20 million automated
property valuations per annum. Hometrack provides residential
property market insights, analytics, valuations and data services
to over 400 partners including mortgage lenders, new home
developers, investors, housing associations and local
authorities.
Hometrack currently partners with 15 of the top 20 mortgage
lenders in the UK as well as all 4 leading Australian mortgage
lenders and its UK AVM is recognised by all major ratings
agencies.
IMPORTANT NOTICE
The securities referred to herein will not be or have not been
registered under the US Securities Act of 1933, as amended, and may
not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQSDUFMFFWSEFF
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January 31, 2017 11:35 ET (16:35 GMT)
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