Zillow acquires trulia for $3.5bn
The rumoured acquisition prompted Zillow and Trulia shares to jump 15 and 32 per cent respectively following a report from Bloomberg at the end of last week. Now, the merger has been officially announced, combining the two most-visited property sites in the US (according to ComScore, Inc).
Together, the sites will create one real estate giant, which will maintain both Zillow and Trulia brands. Indeed, both sites place great emphasis on media and information, offering buyers, sellers, homeowners and renters access to data for free. They generate the majority of their revenue through advertising sales to real estate professionals.
Trulia CEO Pete Flint will remain in his position but will join the Board of Directors of the combined company and report to Zillow CEO Spencer Rascoff.
Trulia shareholders will receive 0.444 shares of Class A Common Stock of Zillow, Inc. for each share of Trulia, and will own approximately 33% of the combined company at closing. Current Zillow holders of Class A Common Stock and Class B Common Stock will receive one comparable share of the combined company at closing, and will represent approximately 67% of the combined company.
The two brands have limited consumer overlap – approximately half of Trulia.com's monthly visitors do not visit Zillow.com, and approximately two-thirds of Zillow.com's monthly visitors across all devices do not use Trulia.com. Maintaining the two distinct consumer brands will allow the combined company to continue to offer differentiated products and user experiences, attract more users and maximize the distribution of free content across multiple platforms, apps and channels.
"Consumers love using Zillow and Trulia to find vital information about homes and connect with the best local real estate professionals," Rascoff said.
"Both companies have been enormously successful in creating compelling consumer brands and deep industry partnerships, but it's still early days in the world of real estate advertising on mobile and Web. This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry."
"Trulia and Zillow have a shared mission and vision of empowering consumers while helping real estate agents, brokerages and franchisors benefit from technological innovation," said Flint.
"By working together, we will be able to create even more value for home buyers, sellers, and renters, as well as create a robust marketing platform that will help our industry partners connect with potential clients and grow their businesses even more efficiently. Our two companies share complementary employee cultures with innovative, consumer-first philosophies and a deep commitment to create the best products and services for our industry partners."
By combining resources, the companies expect to accelerate innovation on mobile and Web to provide "more valuable tools and services to consumers and professionals".
The agreement is subject to the satisfaction of customary closing conditions, including the expiration of U.S. antitrust waiting periods and shareholder approval of both companies.