UK’s Biggest Dealmaker Alex Chesterman Makes £135 Million From ZPG

Alex Chesterman, the Zoopla founder and chief executive, stands to make an impressive £135 million from ZPG, which is being snapped up by a US private equity firm.

Silver Lake, which has investments in companies such as Alibaba, GoDaddy and Tesla, agreed to buy ZPG in a £2.2 billion all-cash deal at the end of last week, with Chesterman netting around £60 million from the sale of the 12.5 million shares he has in the business.

He previously made £33.6 million when the group listed in 2014, and a further £40 million from selling shares between 2015 and 2017.

Zoopla became the UK’s second biggest portal in 2010 – just two years after it was launched.
Source: ZPG

The deal has been backed by more than 31% of investors including ZPG’s largest investor DMGT, the parent company of the Daily Mail, which is in line for a £640 million pay out from the sale of its 29.9% stake.

Chesterman, 48, is a serial entrepreneur who set up Zoopla in 2007. A year earlier he merged his online DVD rental business ScreenSelect with LoveFilm, which was then sold to Amazon in 2011 for £200 million.

As well as Zoopla, ZPG owns and operates uSwitch, Money, PrimeLocation and Hometrack.

Chesterman is an active angel investor, having backed early-stage start-ups such as food company Graze and online discount sports retailer SportPursuit.

He founded bagel shop chain Bagelmania in the late 1990s after working as an executive at burger joint Planet Hollywood in the US. He received an OBE in 2016 for services to digital entrepreneurship.

At Zoopla, Chesterman has faced challenges from traditional estate agents, such as Savills, Douglas & Gordon, Strutt & Parker and Knight Frank, which joined together to form rival business OnTheMarket.

But Zoopla, and its biggest peer Rightmove, have managed to stave off the problems facing traditional listed estate agents such as Foxtons and Countrywide, whose profits have suffered during the slowdown in UK residential property transactions and the rise of online rivals.

Since it listed in 2014, when it achieved a market capitalisation of nearly £1 billion, ZPG’s share price has risen more than 60%, according to the Financial Times.

Chesterman said Silver Lake is the global leader in technology investing, adding: “I am firmly of the belief that ZPG will benefit from their technology expertise and global network which will help accelerate our growth.” He said the terms of the acquisition represent an attractive premium that “recognises the quality of ZPG’s businesses and the strength of its future prospects”.

Simon Patterson, managing director of Silver Lake, said ZPG has established strong positions in property classifieds, home and financial services markets by innovating in product and marketing.

“We are delighted to partner with Alex Chesterman, one of Europe’s leading and most accomplished technology entrepreneurs, to invest in ZPG’s continued growth,” he stated.

Paul Zwillenberg, chief executive of DMGT, told the Financial Times that Chesterman had a “maniacal emphasis on product”, adding: “He is at heart a great product person …he figures out where the pain points are and what the solution is. Lots of people can see how things are evolving, but few people have the attitude and risk to see it through.”

ZPG is being taken over six months after its £460 million bid for rival GoCompare was rejected.

DealMakerz thinks the deal is a great example of the entrepreneurial success that Chesterman has brought for the UK, turning Zoopla into a globally-recognised brand.

It’ll be interesting to see if Silver Lake introduces a “buy it now” function along the same lines of US portal Zillow.

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