Moneysupermarket has bought a tech company for £40m to help "bring price comparison to the user"

Lucy White
Moneysupermarket is attempting to take its comparison services onto partner sites (Source: Moneysupermarket)

Price comparison site Moneysupermarket has bought a tech company for £40m, to help it extend its services onto partners' websites.

Decision Tech, which was previously backed by the Business Growth Fund (BGF), offers its own price comparison services in the home communications and mobile phone sectors.

By joining with Decision Tech, Moneysupermarket hopes to fill the goal it announced in its February preliminary results of "bringing price comparison to the user".

Read more: Not so Moneysupermarket now: Shares plunge as energy bargains dry up

"We are tapping into the opportunity to take price comparison to the sites people are already visiting regularly on their mobile phones," the company said in its results.

"Someone checking their bank balance online, for example, may welcome the offer of a better broadband deal."

Decision Tech's founder and the existing management team will continue to run the business.

Analysts were generally positive about the deal, as Moneysupermarket's shares climbed 1.56 per cent over the day.

Read more: Not so epic: Moneysupermarket has been fined £80,000 over marketing emails

Investec analysts said the deal was a "smart acquisition" and a "good marker of management intent/ambition".

Shore Capital noted that Decision Tech was forecast to generate earnings of £3.6m for the year ended March 2018. "On a first pass basis this does not seem overly cheap, but is difficult to judge in the absence of any additional information on its financials or growth performance – although we note that the deal is described as “earnings accretive," Roddy Davidson wrote in a note.

Moneysupermarket's share price is only just beginning to recover from a massive plunge in February, as it warned on future earnings and announced a £40m share buyback.

Read more: Moneysupermarket announces share buyback after growing profits

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