Trulia Set To Be Acquired By Zillow

Trulia Set To Be Acquired By Zillow

Zillow is set to acquire Trulia in a deal worth $3.5 billion. The shareholders of Trulia will receive 0.444 shares of the online real estate aggregator for each stock they own in the stock-for-stock agreement.

Around 67 percent of the company will be owned by the shareholders of Zillow while the remaining 33 percent will be owned by the shareholders of its competitor. The deal is expected to be finalized by 2015.

The two real estate companies facilitate the sale of homes while linking consumers with real estate professionals. Consumers also visit the websites of the two companies to get advice on the purchase of real estate. Most of the revenue of the two companies is generated through advertising.

Despite the proposed purchase, the combined revenue of the two companies is less than four percent of the total marketing expenses of real estate professionals every year. However, the websites of the two companies have attracted consumers who intend to purchase real estate. Zillow revealed that it had around 83 million unique visitors on its website last month. On the other hand, its rival was able to attract around 54 million unique users.

Once the agreement is given the go-signal from regulators, the two brands will remain separate, but the board of directors of Zillow will include the CEO of its competitor, Pete Flint.

The two companies will have to seek the approval of regulators before the deal is approved. The systems of the two companies will be integrated to facilitate a multiple listing service across their websites. The integration is beneficial for the two companies since their target market will increase.

Shares of Zillow declined to $151.51 or by around five percent following the announcement of the deal. On the other hand shares of Trulia went up to $62.87 or by twelve percent in pre-market trading.

Posted by James Fried on Friday August 01 2014, 4:02 AM EST. Ref: CNET. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0