Zoopla Property Group (ZPG) dropped the bombshell that it has agreed to a £2.2 billion ($2.9 billion U.S.) acquisition offer from Zephyr Bidco, a subsidiary of American private equity firm Silver Lake. The news emerged via ZPG’s announcement to the London Stock Exchange, where ZPG is listed.
The Zoopla Group comprises a number of real estate portals, software companies, and comparison sites. These include Zoopla.co.uk, the second-biggest property portal in the U.K., up-market real estate site PrimeLocation.com, property analytics firm Hometrack; and a consumer comparison sites such as USwitch and Money.com.
According to this morning’s LSE bulletin:
The boards of Bidco and ZPG are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of ZPG by Bidco. The Acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act. …
The Acquisition values the entire issued ordinary share capital of ZPG at approximately £2.2 billion on a fully diluted basis.
Bidco has received an irrevocable undertaking from DMGZ (being a group company of Daily Mail and General Trust plc and ZPG’s largest shareholder) to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in respect of its entire beneficial holding of ZPG Shares.
According to the ZPG news release on the deal, nicknamed “Project Sodium”, described the purchasing company thus:
Bidco is a wholly-owned indirect subsidiary of funds managed by Silver Lake. Silver Lake is the world’s leading investment firm focused on technology and technology-enabled businesses, with around $39 billion in assets under management. Silver Lake acts as a strategic participant in the technology industry, with an unparalleled network of relationships built over nearly two decades and a portfolio of market-leading technology companies that, in aggregate, generate over $170 billion of annual revenue and employ over 340,000 people.
As far as the timetable for the deal, ZPG noted the scheme must still be approved by at least 75 percent of shareholders at the court meeting and general meeting. The LSE document reported that the ZPG directors intend to “recommend unanimously” that shareholders vote in favor and they have “irrevocably undertaken to do in respect of their own beneficial holdings.”
Crucially, Bidco has also received an “irrevocable undertaking” from DMGZ (Daily Mail and General Trust plc) which is Zoopla’s largest shareholder. It controls around 30 percent of ZPG shares, with the directors holding just over one percent, so Bidco is already assured of 31 of the necessary 75 percent cooperation.
Assuming it is approved, the scheme will “become effective as soon as practicable, anticipated to be during the third quarter of 2018,” said the ZPG statement.