MoneySavingExpert, one of the UK’s most successful digital businesses, is being acquired by MoneySupermarket Group plc for a maximum total consideration of £87 million. MoneySupermarket’s announcement is here.
The deal consideration is structured partly as a earn-out, with:
- £60 million payable upfront, £35 million in cash and £25 million in shares.
- Deferred consideration of up to £27 million, in cash and shares, payable 3 years after consideration. The earn-out structure is relatively unusual, being subject:
- in part, to the future performance of MoneySavingExpert against “non-financial metrics”; and
- in part, to MoneySupermarket.com’s discretion.
The acquisition is a Class 1 for listed MoneySupermarket and so is subject to shareholder approval. It will be interesting to see the contractual wording underlying those earn-out conditions when the shareholder circular is published.
Margins!
MoneySavingExpert enjoys a remarkable ratio of turnover to EBITDA. In its last full financial year, it made EBITDA of £12.6 million on turnover of £15.7 million. That’s a cash machine.
Another loss to the public markets
The deal confirms just how unattractive the UK public markets are for tech businesses, when such a remarkably successful growth company chooses to sell itself rather than float
Other interesting features
- MoneySupermarket is MoneySavingExpert’s largest provider, representing 59% of its revenues in its last full financial year.
- The parties have agreed an editorial code to preserve MoneySavingExpert’s “independence”.
- Competition conditions are a condition to the acquisition.
- MoneySupermarket had 39 million unique visitors and 277 million page impressions in its last full financial year.
An interesting set of FAQs about the deal has been posted by Martin Lewis on the MoneySavingExpert site here.
