LDC exits uSwitch in £160million sale to Zoopla

LDC has conditionally agreed the sale of leading price comparison website uSwitch to Zoopla Property Group plc (ZPG).

The transaction, which is subject to regulatory approval, values uSwitch at £160million, plus a performance-based earn-out of up to £30million.

LDC backed the original management buyout of uSwitch in August 2013 and the sale will deliver a day one money multiple of 2.4x and an IRR of 69 per cent.

Over the last 12 months, LDC has worked with the management team to support the expansion of uSwitch’s platform, which has driven significant growth and market share gain. uSwitch has continued to expand its services in the energy division as well as non-energy products and services, including mobile, broadband and financial services.

Revenue in its 2014 financial year reached £62.9million whilst underlying profit (EBITDA) increased 30 per cent to £16.2million.

The transaction also provides an exit for private investment group, Forward Private Equity, which invested in uSwitch in 2009 and retained a minority shareholding.

Founded in 2000, uSwitch is the UK’s number one price comparison website in the home services sector and is one of the most widely recognised and trusted brands in the price comparison space.

ZPG, which is listed on the London Stock Exchange, is a digital media business which owns and operates some of the UK’s leading online property brands including Zoopla and PrimeLocation. It was founded in 2007 by Alex Chesterman. According to ZPG, the acquisition is a significant step in its mission to be the most useful resource for consumers and the most effective marketing partner for professionals across the property space, bringing together highly complementary brands focused on championing and empowering consumers to make smarter property decisions. The combined business will offer advertisers enhanced lead generation, more frequent user engagement and additional revenue opportunities from new products and data.

uSwitch will continue to operate as a standalone brand and platform and its management team will remain with the business, including CEO Steve Weller.

Chris Hurley, CEO of LDC, said: “The acquisition by Zoopla Property Group is a strong outcome for all parties and an ideal strategic fit, creating an enlarged data-driven group of companies that can fulfil a broader number of transactions for customers at the point of moving home. We wish the uSwitch management and ZPG every success for the future.”

Steve Weller, CEO of uSwitch, said: “The support of Chris Hurley and the team at LDC has been critical in helping us scale the business over the last two years, strengthening our position in a highly competitive and fast-moving sector. As part of Zoopla Property Group, we now have the ideal opportunity to continue that journey as part of a broader group, offering customers of both brands a deeper, richer experience.”

Alex Chesterman, Founder & CEO of Zoopla Property Group Plc, said, “This is a transformational acquisition and a meaningful step towards delivering our long-term strategy to be the market-leading resource for consumers and most effective lead generation engine for professionals in the property space. We have always been at the forefront of innovation in our industry and this deal brings together two of UK's best known and fastest growing digital brands as a natural next step towards creating the ultimate platform where consumers can research, find and manage their home.”

The seller group was advised by Lincoln International and CMS Cameron McKenna.

Notes to Editors

  1. LDC is the private equity arm of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority.  
  2. LDC backs ambitious management teams from UK-based medium sized companies seeking up to £100m of investment to fund management buyouts or development capital transactions.
  3. LDC invests in a broad range of sectors and has particular experience in Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure, Support Services, Construction & Property and Financial Services.
  4. LDC has a UK regional network with locations in Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Newcastle, London, Manchester, Nottingham and Reading.