Zoopla owner ZPG sold for £2.2bn

Venture capital firm Silver Lake Management swoops for group which also owns uswitch comparison site

A SILICON Valley venture capital firm has swooped for the owner of Zoopla in a £2.2bn bet that Britain’s £300bn a year property market is ripe for more digital upheaval.

Silver Lake Management yesterday put forward an offer for ZPG, which also owns price comparison site uswitch and Prime Location, another property website, to seize a strong position in a market in which analysts forecast more mergers.

As the traditional high street estate agents such as Foxtons and Countrywide continue to struggle, digital companies have increasingly appealed to house hunters.

ZPG has a valuable portfolio of property values as well as a record of purchasing behaviour for the millions of customers which use its services – information that could be sold to estate agents or vendors directly. Angus Grierson, managing director of LGB Corporate Finance, said the deal showed “international recognition of the growing importance of digital disruption in the UK residential sector”.

In a further sign that the sector is moving towards more consolidation, it emerged that online estate agents emoov and Tepilo are considering a merger in an attempt to rival larger web-based players.

A combined business would be worth around £100m, and could consider floating on the London Stock Exchange later this year.

Silver Lake specialises in investing in technology companies in order to exploit areas where it thinks there is growth potential.

Its offer to buy the company for 490p in cash per share represents a 31pc premium on ZPG’S closing share price on the previous day, and more than the 401p all-time high reached in March 2017. ZPG shares surged 30.6pc to close at 490p yesterday.

Jessica Pok, analyst at Peel Hunt, said Silver Lake’s offer reflects the potential scale of merger deals in the wider technology market and suggests investors are yet to invest as heavily in online companies as in their more traditional rivals.

“Moreover, this deal today shows private equity are thinking the same,” she said.

One winner of the deal could be the Daily Mail’s parent company, Daily Mail and General Trust, which as ZPG’S largest shareholder will pocket around £640m if it goes ahead. DMGT held a 55pc stake in the business after its own online property firm merged with Zoopla in 2012, and now has a 29.8pc share after the company floated on the London market in 2014.

It is understood to have invested around £62m in property websites since it acquired its first site, Findaproperty, in 2004, meaning it has made a huge return on its investment.

DMGT refused to comment on its plans for the money, which more than covers its debts and will result in a cash surplus of hundreds of millions.