CoStar Group, Inc. has announced a proposal to acquire United Kingdom property portal OnTheMarket, for £1.10 per share in cash or approximately £100 million.
OnTheMarket was founded by agents in 2013, the company stated, to provide a competitive alternative to the existing UK property portals. Today, the portal has over 13,000 agent advertisers, the company said.
CoStar Group stated they collect information in approximately 190 countries, have clients in over 135 countries, and operate 28 property portals. The company is backed by almost 1,200 software developers who work with the industry’s best content, data, and research to continually build new tools that improve the efficiency of property markets and serve hundreds of millions of users every month.
Andy Florance, founder and chief executive officer of CoStar Group, said: “We believe the acquisition of OnTheMarket represents an attractive and efficient entry point into the £8 trillion United Kingdom residential property market. We are excited to welcome the OnTheMarket team to the CoStar Group family.”
“OnTheMarket’s network of property professionals and breadth of advertiser relationships provide a strong foundation to compete with the dominant United Kingdom property portals,” continued Florance. “The combination of OnTheMarket’s large network of agents and access to listings, together with the marketplace experience and resources of CoStar Group, has the potential to create the leading agent-friendly player in the UK residential marketplace. We see OnTheMarket as an important step in expanding our Homes.com residential network not only in the UK, but across Europe. We believe the market opportunity in Europe is over $10 billion, and we intend to participate aggressively in developing and expanding our residential marketplace network.”
CoStar Group stated they intend to invest £46.5 million into sales and marketing in the first full year following the commencement of the integration of the portal into CoStar’s network of residential marketplaces. The sales and marketing investment is the first stage of a multi-year investment program totaling hundreds of millions of pounds to drive more consumers to the OnTheMarket portal with the goal of significantly increasing the quantity of valuable leads to OnTheMarket’s agent clients.
Jason Tebb, CEO of OnTheMarket, said: “We are very much looking forward to joining the CoStar Group residential network. From a position of strength, the partnership will significantly accelerate our strategy with a clear target of becoming the market leader. Together we share a long history and strong commitment to agents, who will benefit from CoStar’s commitment to maintaining our fair and sustainable pricing model and greater opportunities to enhance their businesses.”
The transaction is expected to close in the fourth quarter of 2023, subject to shareholder approval and customary closing conditions. CoStar Group plans to discuss the OnTheMarket acquisition during the third quarter 2023 financial results conference call scheduled for October 24, 2023.
For more information, visit https://www.costar.com/home/demo.
