Online property site Zoopla has announced the purchase of price comparison service uSwitch for a fee which could rise to £190 million.
Both sites have proven popular among home buyers and owners; the former allowing them to find details about houses across the UK, the latter giving them the chance to find a better deal on their utilities, both via the web.
Combining the two services would result in a handy service for searching and managing property, with a great deal of reach over the British market.
However, the companies have declared that both will continue to trade as separate entities for the foreseeable future.
The deal sees the exchange of £160 million upfront with the promise of an additional £30 million depending on performances. A positive reaction from traders caused shares in Zoopla to jump 14% this morning (April 30).
The “ultimate platform”
USwitch seeks to help people save money on their everyday expenses, which along with bills for electricity, heating cover and home phones extends to personal finance products and insurance.
Murmurs of putting price comparison and property finding ‘under one roof’ were amplified following comments from Zoopla CEO Alex Chesterman, who announced plans to work on a combined offering.
“We have always been at the forefront of innovation in our industry and this deal brings together two of UK’s best known and fastest growing digital brands as a natural next step towards creating the ultimate platform where consumers can research, find and manage their home,” he commented.
Upon a suggested completion in June, the acquisition will see uSwitch gain a new majority shareholder following time spent under the ownership of a division of Lloyds Banking Group.
USwitch has always been open about how it makes its money, which comes from small commissions triggered from people switching their suppliers.
Based in London, the firm generated profits of £11.7 million in 2014 off the back of over 50 million site visits. It will now be moving forward under the wing of Zoopla, which is looking to build itself up following a mildly disappointing start to the year.
The company announced in February that its number of estate agent advertisers had fallen by 11% over the last year, dropping down to 16,967.
A newly launched firm in OntheMarket has already given its rivals something to think about by only permitting its members to advertise on one other site, effectively meaning agents have to choose between Zoopla and market leader Rightmove.