US real estate firm Trulia buys software maker Market Leader for $355 mn
09 May 2013
US online real estate site Trulia Inc has agreed to acquire Market Leader Inc, a software company focused on developing products for real estate business for approximately $355 million in a cash-and-stock deal.
Under the terms, shareholders of Market Leader will receive $6 in cash and 0.1553 Trulia shares for each share they own. This values about $11.33 a share, representing an 18-per cent premium on its closing price of $9.61 Tuesday.
Kirkland, Washington-based Market Leader is a provider of software for the real-estate industry. It provides end-to-end solutions for real estate agents, brokers, and franchises to grow and manage their businesses.
The company serves over 125,000 real estate professionals with lead generation services, integrated websites, contact management, and marketing centre that generate a steady stream of prospects plus provides the systems and training needed to convert those prospects into clients.
Its national real estate websites, including www.RealEstate.com, give customers access to millions of future home buyers and sellers.
Market Leader has around 278 employees and its annual revenue is around $45 million.
Distinguishing Market Leader as ''an excellent strategic fit for Trulia,'' the company's CEO Pete Flint said, ''Our acquisition of Market Leader will create unprecedented value for our customer base while also accelerating our growth."
The merged entity will have about 46,000 premium subscribers, which is more than any online real estate marketplace.
Through the acquisition, Trulia aims to diversify into the service sector of real estate software business.
The transaction is expected to close in the third quarter subject to approvals by Market Leader's shareholders as well as regulatory authorities.
San Francisco-based Trulia provides home listings through the web and mobile applications and also generates cash by selling subscriptions and advertisements. The company went public in last September and has been reporting double-digit revenue gains for three consecutive quarters.
Trulia displays more than 4.5 million real estate and rental listings nationwide and claims over 22 million visits to its site each month.
The company has around 460 employees and has offices in Denver and New York. Its main rival in the field is Seattle-based Zillow Inc.
In April, Trulia said that it has reduced the first quarter loss as revenue nearly doubled to $24 million, higher than analysts' forecast.
Commenting on the result, Flint said, "Trulia achieved an excellent start to 2013. We achieved another quarter of record revenue, driven by strong execution in both our marketplace and media businesses. Trulia's mobile traffic continues to expand at a rapid rate, while our subscriber base grew by approximately 3,500 during the quarter."
The merged company will have its headquarters in San Francisco, although Market Leader will keep an office in Kirkland as well.
Further to the acquisition news, shares in Market Leader surged 12.8 per cent to close at $10.84 Wednesday on Nasdaq, while Trulia shares fell almost 8 per cent to $31.68 on NYSE.
JP Morgan Chase acted as exclusive financial advisor to Trulia on the deal, while Market Leader was advised by GCA Savvian Advisors.