A group listed on New York’s Nasdaq exchange has completed its acquisition of OnTheMarket Plc.
CoStar Group Inc, a provider of commercial real estate information, analytics and online marketplaces, said it had secured the support of 94% of shareholders in the residential property portal, which between them hold 97% of its shares. The majority of shareholders are agents.
Its cash offer of 110 pence per share, first revealed in October, values Aldershot-headquartered OnTheMarket at approximately £99 million.
A court hearing to sanction the scheme was held on 7th December 2023 and the Scheme Court Order is now effective. CoStar said “the failed efforts of a fringe objector without any standing were soundly rejected by shareholders, employees and the court”.
“We are very excited to be joining CoStar Group, in a move which will see our business gain the backing of a proven product and technology market leader,” said Jason Tebb, CEO of OnTheMarket.
“We look forward to working together to accelerate our strategy, with the clear goal of becoming the market leader. To do so with a partner who shares our commitment to a fair and sustainable pricing model constitutes a huge step forward for our company.”
CoStar Group plans to integrate OnTheMarket into its network of real estate marketplaces and anticipates investing £46.5m into sales and marketing in the first full year following the commencement of the integration, six times the current annual media spend and more than three times the current annual media spend of Rightmove plc.
CoStar Group’s initial planned investment will mark the first stage of a multi-year investment programme totalling hundreds of millions of pounds to drive more consumers to the OnTheMarket portal with the goal of significantly increasing the quantity of valuable leads to OnTheMarket’s agent clients.
PropTech 50 – Most innovative UK property tech creators for 2023
Andy Florance, founder and CEO of CoStar Group said: “Today’s announcement gives us the opportunity to combine a leading UK agent friendly site with our technology, expertise, and capital to raise the game for online home shopping in the UK.
“The current market leader has grown complacent focusing on margin over innovation, and pricing ahead of value. The level of shareholder support we received is a major endorsement of our plans to invest in OnTheMarket.
“CoStar Group has been transforming the world’s real estate through digitisation for over three decades. We are relentlessly focused on empowering our customers, delivering this through strong growth in our portals, as well as our data & information businesses.
“As we digitise the sector and continue to enhance the experience of all those we work with, we are also focused on our investments into Europe, a market that is moving very quickly.
“Our OnTheMarket acquisition sits firmly within this strategy, and we will bring all our experience to bear as we take OnTheMarket to new levels of success while keeping costs to advertisers at a sustainable level.”