* To pay 35 mln stg in upfront cash, 22.1 mln shares
* Deal includes conditional deferred payment of 27 mln stg
* Expects deal to add to earnings in first full year
June 1 Price comparison website
MoneySupermarket.com Group said it would buy British
personal finance website MoneySavingExpert in a deal worth up to
87 million pounds ($133.91 million).
The deal comes at a time when price comparison websites like
MoneySupermarket have benefited from shoppers actively looking
for promotional deals to make their money go further as rising
prices, muted wage growth and government belt-tightening put the
squeeze on British disposable income.
MoneySupermarket, whose website had 140 million visitors
last year, said it would pay 35 million pounds in cash and 22.1
The deal is expected to add to MoneySupermarket's earnings
in the first year, and includes a deferred consideration of up
to 27 million pounds conditional on MoneySavingExpert meeting
certain non-financial goals.
Founded in 2003 by journalist Martin Lewis,
MoneySavingExpert offers free services, including information
and recommendations on credit cards, loans, shopping, deals,
banking and saving, and insurance.
The consumer oriented website, whose motto is "Cutting your
costs. Fighting your corner!", gets about 59 percent of its
revenue from MoneySupermarket.
Tee acquisition will be funded through existing cash and a
new 20 million pound bank facility, and is expected to be
completed between September and October.
"This is an interesting deal albeit that it does in part
seem to be a defensive step against the increasing encroachment
of Google into the price-comparison space," Peel Hunt analyst
Mark Williamson said in a note.
Williamson said that with the company using its cash and
taking on debt to fund the purchase, the deal will reduce the
prospect of further special dividends in the near term.
"... The inherently strong underlying cash generation
suggests that a resumption of special dividends should be
possible within a couple of years."
MoneySupermarket shares were up 1 percent at 116.45 pence at
1003 GMT on Friday on the London Stock Exchange. They have
gained 10 percent this year.