OnTheMarket agrees to £99m takeover by US real estate giant
CoStar will pay 110p a share for the online property portal, marking a 56% premium on shares as of Wednesday’s market close.
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Your support makes all the difference.Online property portal OnTheMarket has agreed to a near-£100 million takeover by US property giant CoStar Group.
CoStar will pay 110p a share for OnTheMarket, valuing the group at £99 million and marking a 56% premium on shares as of Wednesday’s market close.
It comes after tough recent trading for estate agent-backed OnTheMarket, which earlier this year was hit by high levels of agents cancelling contracts, while the wider housing market has also been hammered by soaring mortgage costs and slumping buyer demand.
OnTheMarket, which was set up in 2013 and listed on London’s junior Aim market four years later, said the deal will help “accelerate our transformation” of the sector, with the group said to be hoping it will help it take on the might of larger rivals Rightmove and Zoopla.
For Nasdaq-listed CoStar, it marks its first step into the UK residential property market.
CoStar will bring industry-leading global expertise and significant financial firepower to invest in OnTheMarket, allowing us to accelerate our transformation of the sector
OnTheMarket chief executive Jason Tebb said: “CoStar will bring industry-leading global expertise and significant financial firepower to invest in OnTheMarket, allowing us to accelerate our transformation of the sector.
“We have strong shared values in our commitment to agents who we believe will benefit from unparalleled value and greater opportunities to enhance their businesses.”
Andy Florance, founder and chief executive of CoStar, said: “We believe the acquisition of OnTheMarket represents an attractive and efficient entry point for CoStar into the estimated £8 trillion United Kingdom residential property market.”
OnTheMarket said management unanimously back the deal, which they expect to complete in the fourth quarter, if given the go-ahead by investors.
CoStar has a stock market valuation of more than 33 billion US dollars (£27 billion).
It has made a raft of acquisitions, most recently US residential real estate website Homes.com, which has seen its monthly unique users surge from 6 million to more than 100 million in the past year under CoStar’s ownership.
The OnTheMarket deal comes amid a shake-up in the UK property sector, with troubled online player Purplebricks recently sold for a nominal £1 to rival Strike, which is backed by Carphone Warehouse founder Sir Charles Dunstone.