M&A Update: Zoopla Buys Another Property Company As Share Price Rockets

Portal giant Zoopla (ZPG) have confirmed their acquisition of Expert Agent, a cloud-based software company that provides systems for the day-to-day management of inventory, marketing and communications for estate and lettings agents across the UK.

In this article, DMZ takes a closer looks at the acquisition monster that is ZPG and the effect of their M&A on the broader market.

Used by 16,000 negotiators in over 2,500 branches, Expert Agent was started in 2004 by former agent Mike Griffiths.

With an alleged turnover of around £3million, a staff of 34 and company accounts testifying a comfortable £2.6million currently resting in the bank, on face value it looks like another solid buy for ZPG.

Both parties appeared happy with the deal, “we have known the ZPG team for many years and the combination with Expert Agent will be a clear win for UK agents,” said CEO Mike Griffiths.

Zoopla MD Mark Goddard praised the acquisition, “our ambition is to be the most effective partner to the UK property industry and this deal is another step towards that goal. We look forward to welcoming Mike and his team to the ZPG family…we will integrate our MoveIT and MyPropertyFile products into the Expert Agent platform in time to provide its members with a range of new revenue opportunities.”

The latest move is another stake in the ground for ZPG and a clear warning to competitors RightMove and OnTheMarket of their lofty ambitions to dominate across the property supply chain.

Only last month Zoopla confirmed their purchase of the property data firm HomeTrack for £120million, last year they paid £75million to purchase The Property Software Group and in 2015 they bought comparison service site uSwitch for £190m. This acquisition-led strategy is not new to the property group however, throughout their history they have splurged on multiple acquisitions including the PropertyFinder Group, Globrix.com and Thinkproperty.com.

The approach seems to be working: pre-tax profits at the FTSE 250 Company increased by a whopping 38% to £46.2m in 2016. City analysts remain bullish on the portal; Liberum Capital affirmed their “buy” rating on ZPG shares, with brokers Canaccord Genuity and Numis Securities predicting further price rises in the stock.

Zoopla’s share price is at an all-time high, but city analysts think it has further room to grow

DMZ are not surprised by the latest acquisition by Zoopla – it’s clearly their modus operandi to buy profitable businesses across the property supply chain to strengthen their position and diversify against any market swings. However, the firm are still vying to compete with the sheer scale of arch rivals Rightmove.

Last month RightMove announced a pre-tax annual profit of £161million, a £24million increase on the previous year and over three times more profitable than Zoopla’s recent figures. With this in mind, and the ongoing rib-jabbing of OnTheMarket, DMZ would advise Zoopla to continue with their acquisition strategy and consider targets with multi-country exposure, like HomeTrack’s prominent position in Australia, to strengthen the brand internationally – a move that would also further diversify the group from any negative UK property swings.

Click here to check out pictures of Zoopla’s swanky new London office.