MoneySupermarket.com Group plc Proposed Acquisition of MoneySavingExpert for up to £87 million
MoneySupermarket.com Group plc ("MoneySupermarket.com" or the "Company") has announced that it has conditionally agreed to acquire MoneySavingExpert as a going concern from Martin Lewis and MoneySavingExpert.com, for consideration of up to £87 million (the "Acquisition").
MoneySavingExpert operates one of the UK's leading personal finance and personal finance journalism websites which was established in 2003 by personal finance journalist Martin Lewis. According to Google Analytics, the MoneySavingExpert website attracted approximately 39 million unique visitors and approximately 277 million page impressions in the year ended 31 October 2011.
In the year ended 31 October 2011, MoneySavingExpert reported revenues of £15.773 million (2010: £11.361 million) and EBITDA of £12.642 million (2010: £8.379 million).
The MoneySavingExpert website offers free online services, including information to its users, which MoneySavingExpert has researched including in the areas of credit cards and loans, shopping, deals and vouchers, utilities and phones, banking and saving, travel and motoring, insurance, mortgages and homes, and income and family. MoneySavingExpert's services include a range of online tools, researched articles in respect of specific products, personal finance guides, weekly newsletter emails which are sent to subscribers, online forums and a blog written by Martin Lewis. Martin Lewis and the MoneySavingExpert website also provide information and promote topical consumer focused issues such as financial education in schools and reclaiming payment protection insurance.
MoneySupermarket.com is MoneySavingExpert's largest provider, with payments made by MoneySupermarket.com to MoneySavingExpert representing approximately 59% per cent of MoneySavingExpert's revenues for the year ending 31 October 2011, as a supplier of links to product providers mentioned within MoneySavingExpert's editorial and direct links to MoneySupermarket's price comparison services. The other providers of MoneySavingExpert are predominantly other intermediaries, including a number of other price comparison websites. MoneySavingExpert does not tend to have direct relationships with financial product providers, however occasionally direct links are included on the MoneySavingExpert website.
- MoneySavingExpert business to be acquired for a total consideration of up to £87 million
- £35 million upfront cash and approximately 22.1 million MoneySupermarket.com shares
- deferred consideration of up to £27 million subject, in part to the future performance of MoneySavingExpert against non financial metrics and, in part, to MoneySupermarket.com's discretion
- Acquisition to be funded out of existing cash resources and from a new £20 million bank facility
Benefits of the Acquisition
- Value proposition:
- Attractive acquisition multiple
- Expected to be earnings enhancing in the first full financial year of ownership
- Corporation tax relief expected to be available on virtually all of the consideration payable
- Combination supports and enhances MoneySupermarket.com's strategy through:
- Enhancing MoneySupermarket.com's brand and user content
- Growing MoneySupermarket.com's direct-to-site revenues and improving MoneySupermarket.com's customer experience
- Utilising MoneySupermarket.com's skills to optimise MoneySavingExpert's website and user experience
On completion, Martin Lewis will become an employee of the MoneySupermarket.com group and his role will be editor-in-chief of MoneySavingExpert. As editor-in-chief he will lead the editorial team of MoneySavingExpert. MoneySupermarket intends to preserve the editorial independence - free of commercial considerations - of MoneySavingExpert. In order to ensure this MoneySupermarket and MoneySavingExpert have agreed an editorial code.
Due to its size the Acquisition is required to be conditional upon MoneySupermarket.com shareholder approval. Completion is also conditional upon certain other conditions, including obtaining certain competition authority approvals. A circular containing the notice convening a general meeting of the Company will be sent to shareholders shortly and completion of the Acquisition is expected by September to October 2012.
Simon Nixon has irrevocably agreed to vote in favour of the resolution to be proposed at the General Meeting in respect of his beneficial holding which amounts to 267,257,021 MoneySupermarket.com shares or 52.48 per cent of the existing issued ordinary share capital (excluding Treasury Shares) of the Company.
Commenting on the Acquisition, Peter Plumb, Chief Executive Officer of MoneySupermarket, said:
"We've worked closely together for years with the common goal of helping customers save money. By joining forces we can get more people to save more money. We'll help MoneySavingExpert.com reach a wider audience and MoneySavingExpert.com will broaden the range of advice and tools we offer, encouraging even more people to take action, tap into the benefits of the internet to find a better deal and make the most of their money.
"MoneySavingExpert.com is rightly trusted by its users as a unique source of independent information and views in today's complex financial world. We are committed to maintaining its trusted, independent, reputation. MoneySupermarket will continue to source even better product offerings for customers and further our goal of saving more customers more money in our quest to save UK consumers £2bn a year by 2014.
"Following completion of the purchase I look forward to welcoming the team of MoneySavingExpert.com to the MoneySupermarket team, led by their founder, Martin Lewis who will be editor-in-chief of the MoneySavingExpert.com site."
Martin Lewis, MoneySavingExpert, added:
"This is great news for MoneySavingExpert.com and its users, ensuring, with or without me, the site will be around for many years to come, maintaining our ethos of 'cutting your costs and fighting your corner'.
"MoneySavingExpert.com has become part of people's daily lives, far bigger than the man who founded it, and now is the right time for it to stand on its own two feet.
"I chose MoneySupermarket to work with as I know and trust them. They understand the site, as they've shown by agreeing the Editorial Code, which ensures our content can proudly remain editorially independent and free from commercial considerations.
"I'm chomping at the bit to get going, and come up with new ways to help people save cash and continue campaigning on issues such as PPI and getting financial education on the curriculum. In keeping with the site's aims, when the deal completes, £10 million will go to charity, including £1 million to Citizens Advice, which is facing terrible funding cuts."