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Trulia to purchase Market Leader for $355 million

Combined company will have 46,000 subscribers, making it the biggest online real estate company

Financial trends and news by Steven Loeb
May 8, 2013
Short URL: http://vator.tv/n/2f58

Online real estate company Trulia has entered into a definitive agreement to acquire real estate SaaS CRM provider Market Leader, it was announced Wednesday. 

Trulia will pay around $355 million for the company, "or an implied price of $11.33 per share"  which is based on Trulia’s closing share price of $34.34 on May 7.

While Trulia provides tools and information for homebuyers, Market Leader partners with major real estate brokerages and franchisors to help their agents build their personal reputations, manage their leads, and ultimately convert those leads into closings. The combined company will have approximately 46,000 premium subscribers, more than any other online real estate marketplace.

The combining of Market Leader and Trulia will benefit users in all aspects of the business, including brokers, real estate agents and consumers, Trulia CEO Peter Flint said in a statment.

Both companies "have deep partnerships with hundreds of real estate brokerages and franchisors," he said.

"Together, we will help brokerages and franchisors enhance the productivity of their agents by offering them the most comprehensive, end-to-end solution via web and mobile devices. Our combined platform also will enable agents to increase their follow-up capabilities, engagement with clients and the return on investment on their leads.”

For real estate agents, they will "benefit from the industry’s first end-to-end solution," and will have access to "unmatched data, combined with leading edge tools for working with consumers to help them find the home of their dreams. Agents that use the combined platform will realize that every lead will become more valuable and the agent will have greater visibility into the value of the lead."

And, when it comes to the consumer, they "will benefit from improved responsiveness and better service from the agents with whom they work."

The acquisition is still subject to the approval of the holders of a majority of the shares of Market Leader’s common stock, as well as customary closing conditions, but the deal is expected to be completed in the third quarter of this year. 

J.P. Morgan is acting as the exclusive financial advisor to Trulia. 

Once the transaction is completed, the combined company will have a headquarters in San Francisco. Meanwhile, Market Leader will continue to also operate out of its offices in Kirkland, Washington, and "will operate as a wholly-owned subsidiary of Trulia."

San Francisco-based Trulia was founded in 2006 by Flint and Sami Inkinen. The company raised over $33 million, including raising a $10 million Series C in 2007, led by Sequoia Capital, as well as previous investors Accel Partners and Fayez Sarofim & Co., and raising a $15 million Series D in 2008, from Sequoia Capital and Accel Partners, before it went public in September 2012.

The company recently reported revenue of $24.0 million in the first quarter of 2013, up 97% year-over-year. As a result, JP Morgan analyst Doug Anmuth raised his price target from $34 to $41. He also raised his projections for FY13 and FY14 revenue by 13% and 15%, respectively.

Trulia's stock has slipped 6.84% on Wednesday, down $2.35 to $31.99 a share. Meanwhile, Market Leader's stock has soared 13.22%, up $1.27 to $10.88 a share.

(Image source: http://valuedrealtyservice.com)