CoStar Group has tabled a £100m bid to acquire UK residential property portal OnTheMarket.
The business, which operates the homes.com and apartments.com residential portals in the US, has offered £1.10 per share in cash for the UK website which was founded by property agents in 2013.
Andy Florance, founder and chief executive officer of CoStar Group, said: “We believe the acquisition of OnTheMarket represents an attractive and efficient entry point into the £8tn United Kingdom residential property market. We are excited to welcome the OnTheMarket team to the CoStar Group family.
“OnTheMarket’s network of property professionals and breadth of advertiser relationships provide a strong foundation to compete with the dominant United Kingdom property portals. The combination of OnTheMarket’s large network of agents and access to listings, together with the marketplace experience and resources of CoStar Group, has the potential to create the leading agent-friendly player in the UK residential marketplace.
“We see OnTheMarket as an important step in expanding our Homes.com residential network not only in the UK, but across Europe. We believe the market opportunity in Europe is over $10bn, and we intend to participate aggressively in developing and expanding our residential marketplace network.”
Jason Tebb, CEO of OnTheMarket, added: “We are very much looking forward to joining the CoStar Group residential network. From a position of strength, the partnership will significantly accelerate our strategy with a clear target of becoming the market leader. Together we share a long history and strong commitment to agents, who will benefit from CoStar’s commitment to maintaining our fair and sustainable pricing model and greater opportunities to enhance their businesses.”
CoStar Group intends to invest £46.5m into sales and marketing in the first full year following the commencement of the integration of the portal into CoStar’s network of residential marketplaces. CoStar Group said this would be the first stage of a multi-year investment programme totalling hundreds of millions of pounds to drive more customers to the portal.
The transaction is expected to close in the fourth quarter of 2023 subject to shareholder approval.
