Real estate website Zillow will buy Trulia

Source: Internet
Author: User
Keywords Acquisitions Zillow trulia
Tags company information market online search stock users website

Absrtact: July 28, the real estate information website Zillow announced in Monday that the company has reached an agreement with the online real estate company Trulia to buy the latter at a price of around $3.5 billion, which will be paid in stock. According to the deal, Zillow will be held to Trulia shareholders of each share

July 28, the real estate information website Zillow announced in Monday that the company has reached an agreement with Trulia, an online property company, to buy the latter at a price of around $3.5 billion, which will be paid in stock.

Under the deal, Zillow will pay 0.444 shares of Zillow shares to Trulia shareholders for each share. Based on the closing price of the last Friday, this means a 70.53 dollar purchase per share, with a premium of around 25% compared with Trulia's current share price.

Zillow and Trulia are pioneers in the online real estate market, which has been competing in the market for most of the past nine years. But after a brief six weeks of contact and negotiation, the old enemy quickly decided to shake hands. The deal, worth billions of of billions of dollars, means that there will be a dominant behemoth in the US online housing information market.

According to data released last month by Zillow, the company's network and mobile internet users totals 83 million people, compared to the total number of Turlia users of 54 million people. According to comscore, a market-research firm, the total number of users in these two companies accounts for 61% of the overall market.

"Two companies know each other very well. Zillow chief Executive Spencer Raskov, Spencer Rascoff, said in a telephone interview. "We have been competitors for the last nine years, but I have always paid tribute to them." ”

Zillow has become one of the best-known players in the online real-estate information market, whose main business is to provide information about the value of a property through Zestimates services that are popular with homeowners who already own homes. On the other hand, Trulia has tools to attract more audiences to potential housing sellers. Rashkov points out that this means there is little overlap between the two companies and points out that about half of Trulia network users do not visit Zllow sites.

Rashkov said his first contact with Trulia on potential mergers and acquisitions was about six weeks ago, when the latter initially responded by refusing to say that it had no intention of selling itself, but at the time Trulia management had consulted with Zillow's acquisition plan. "Two companies are doing it with all their strength. "Rashkov said. "When we engage with them, I think they are also open minded." ”

Trulia management, led by Pitt Flint Peter Flint, eventually showed the intent to negotiate, but demanded that Zillow be paid in full stock, giving Trulia shareholders a chance to benefit from the deal. After the deal is completed, existing Trulia shareholders will have about one-third per cent of the merged company. Flint will remain in the merged company, and he will report to Rashkov and join the Zillow board with another Trulia director.

The merged company is expected to achieve about $100 million trillion in cost savings by 2016. The merged Zillow will have a larger platform, not only for property sellers and real estate intermediaries, but for advertisers as well, and the nascent rental search business of two companies will also be integrated.

Rashkov said he did not think the merger deal would face opposition from antitrust regulators. Last year, two companies had revenues of $341.2 million trillion, while the real estate industry spent 12 billion dollars a year on marketing spending. He also noted that the current status of the real estate industry is highly fragmented, with dozens of local property information sites in every American city.

Previously, Zillow and Trulia were seeking to confront the market's "fragmented" trend through other mergers and acquisitions. Over the past year, Zillow has acquired a streeteasy and apartment search site HotPads focused on the New York market, and Trulia bought harsh at 310 million dollars last spring.

Leader. Rashkov said Zillow's goal was to create a portfolio of real estate properties, which would lead to a higher position in Iac/interactivecorp's search rankings.

The deal is expected to be completed sometime next year, before Zillow and Trulia will continue to compete. In the deal, Zillow hired Goldman Sachs and Schelman Seat law firm (Shearman & Sterling and Perkins Coie.) as financial advisers and legal advisers, while JPMorgan Chase and Qatalyst The company will serve as Trulia's financial advisor, Goodwin Procter and Wilson Sonsini Goodrich & Rosati Two law firms will serve as legal advisers. Snow)

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