Real estate listing website Zillow has purchased mortgage technology company Mortech, it was announced on Monday.
Zillow paid around $12 million in cash and 150,000 shares of restricted stock. The transaction is expected to close in the fourth quarter of 2012.
With this acquisition, Zillow will be able to accelerate the development of Zillow Mortgage Marketplace, its lending marketplace where borrowers are able to instantly connect with lenders, who give them personalized loan options and real-time mortgage rates. Zillow will use Mortech to help deliver more marketing and productivity solutions to mortgage professionals, in order to help them manage their business and convert more contacts to funded loans.
Borrowers submit more than one million loan requests a month on Zillow Mortgage Marketplace, and they receive an average of 25 customized quotes, which they can compare alongside over 22,000 lender reviews.
"We are following our proven strategy of building home-related marketplaces. In the case of Zillow Mortgage Marketplace, we first innovated on behalf of consumers by creating a transparent marketplace where the borrowers' needs come first, then we connected borrowers with lenders, and now we are investing in tools to help lenders be even more successful serving consumers," Spencer Rascoff, CEO of Zillow, said in a statement.
"Enhancing the capabilities of mortgage lenders ultimately leads to a more vibrant and transparent consumer experience."
Lincoln, Nebraska-based Mortech was founded in 1987. It offers a product and pricing engine that helps lenders to quickly match the correct mortgage products to the needs of a borrower at the best price; a lead management platform that helps lenders more efficiently serve borrowers both online and offline; and marketing tools that help to keep lenders' brand and rate quotes in front of borrowers throughout the mortgage shopping process.
"At Mortech, we are focused on helping mortgage professionals do a better job at closing deals through a variety of best-in-class productivity tools," Don Kracl, president of Mortech, said in a statement. "We're thrilled to join the Zillow team, which has demonstrated a deep commitment to empowering both consumers and professionals in the mortgage industry through their innovative mortgage marketplace. Becoming part of Zillow will enable us to broaden the reach of our product and deliver even better technology solutions to lenders."
Mortech will continue to operate from its Nebraska office.
This is Zillow's fifth acquisition. In 2011, Zillow purchased Postlets, an online real estate listing creation and distribution platform, and they also bought Diverse Solutions, a site designed to help real estate agents market their businesses and improve their personal websites.
Zillow acquired RentJuice in June 2012, which it then used the foundation for Zillow Rentals.
Zillow’s most recent acquisition was that of online and mobile collaborative shopping platform Buyfolio, which it purchased at the end of October for an undisclosed amount.
In September, Zillow had over 35 million unique users visitor in its website and apps, which include Zillow Mortgage Marketplace, Zillow Mobile, and Diverse Solutions.
Zillow made its public debut in July 2011 at $20 a share, and saw its stock triple to $60 right out of the gate, and then fall back to end the day at $35.77.
Zillow posted its quarterly results Monday, falling behind Wall Street expectations. Total revenue was $31.9, up 67% from $19.9 million a year earlier, beating analysts’ estimates of $31.7 million.
But for the fourth quarter, the company forecasted revenue at $30 million to $31 million, lower than analysts expectations of $32.5 million.
For 2012, Zillow expects $113 million in total revenue, lower than the $114.8 million consensus.
Zillow shares are down over 16% in pre-market trading Tuesday, and is now trading at $28.70 a share.
(Image source: http://www.zillow.com)