19 October 2023 , 10:41
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Online property portal OnTheMarket is set to be taken over by US property giant Co-star Group in a deal worth nearly £100 million. The American firm will pay 110p per share, valuing OnTheMarket at £99 million, a 56% premium on shares as of Wednesday's market close.
OnTheMarket has had a tough time recently, with many estate agents cancelling contracts and the wider housing market suffering due to rising mortgage costs and falling buyer demand. The company, which was established in 2013 and listed on London's junior Aim market four years later, believes the deal will help "accelerate our transformation" of the sector.
This marks the first foray into the UK residential property market for Nasdaq-listed Co-star. OnTheMarket CEO Jason Tebb said: "CoStar will bring industry-leading global expertise and significant financial firepower to invest in OnTheMarket, allowing us to accelerate our transformation of the sector."
"We have strong shared values in our commitment to agents who we believe will benefit from unparalleled value and greater opportunities to enhance their businesses."
Andy Florance, the boss of CoStar, said: "We believe the acquisition of OnTheMarket represents an attractive and efficient entry point for CoStar into the estimated £8 trillion United Kingdom residential property market."
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OnTheMarket's management unanimously back the deal, which they expect to wrap up in the fourth quarter, if investors give it the thumbs up.
CoStar is valued at more than 33 billion US dollars (£27 billion) on the stock market.
It has snapped up a number of companies, most recently US residential real estate website Homes.com, which has seen its monthly unique users jump from 6 million to over 100 million in the past year under CoStar's ownership.
The OnTheMarket deal comes as there's a shake-up in the UK property sector, with troubled online player Purplebricks recently sold for a nominal £1 to rival Strike, which is backed by Carphone Warehouse founder Sir Charles Dunstone.
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