Online property portal Zoopla is to buy Property Software Holdings – a B2B service provider used in more than 8,000 estate agency branches in the UK – for £75m.
The deal, under which Property Software Group (PSG) will join the likes of uSwitch and PrimeLocation, gives Zoopla access to a number of systems used by the property industry, including cloud-based services Alto and Jupix, desktop systems Vebra, Core and CFP and newly launched software MyPropertyFile and MoveIt.
In the year ended 31 March, PSG generated revenues of around £15.9m and adjusted Ebitda of £5.1m.
Zoopla said the deal would "enable the enlarged group to offer agents in the UK property industry's first end-to-end solution including software and CRM, digital marketing and market insight tools and further revenue opportunities".
It comes as the group said it now expects full year figures – which will be published on 25 May – to come in "towards the higher end of market expectations". Zoopla's share price was up 2.5 per cent on the news.
After completion, PSG will continue to operate as a standalone platform and brand. Chief executive Mark Goddard will become managing director of the combined group's property services division, reporting to Zoopla group founder and chief executive Alex Chesterman.
Zoopla said it expects the acquisition to be earnings enhancing in the first full year after completion. The transaction will be funded from the group's existing cash and a £50m extension of the current debt facility it has secured from its existing lenders
The transaction provides an exit for PSG's institutional backers, LDC, the private equity arm of Lloyds Banking Group, which originally invested in the business in December 2013 and part of the management team including Mark Goddard, Eduardo Mardell and James Toogood
Chesterman said: "This acquisition is a game-changer, combining ZPG's best-in-class property marketing solutions with PSG's best-in-class property workflow solutions, and will transform the services available for both UK agents and consumers.
"Our ambition has always been to be the most effective partner to the UK property industry and this deal will allow us to work more closely with our agent partners and offer them an even more compelling service. I look forward to welcoming Mark and his team to the ZPG family."
Goddard added: "I am very proud of what we have achieved over the last nine years but it is just the start. We've had a long-standing relationship with the team at ZPG and are incredibly excited to continue our journey as part of their growth and innovation story.
"We are very much looking forward to continuing to develop unmatched software tools and innovative products and to delivering even better value to our clients."