Combination of companies sets stage to offer
more real estate tools and services that empower consumers and
drive more business for real estate professionals
Zillow, Inc. (NASDAQ:Z) today announced that it has entered into
a definitive agreement to acquire Trulia, Inc. (NYSE:TRLA) for $3.5
billion in a stock-for-stock transaction. The Boards of Directors
of both companies have approved the transaction, which is expected
to close in 2015.
The combined company will maintain both the Zillow and Trulia
consumer brands, offering buyers, sellers, homeowners and renters
access to vital information about homes and real estate for free,
and providing advertising and software solutions that help real
estate professionals grow their business. At closing, Trulia CEO
Pete Flint will remain as CEO of Trulia reporting to Zillow CEO,
Spencer Rascoff, and will join the Board of Directors of the
combined company. In addition, at closing, a second member of
Trulia’s Board of Directors will join the board of the combined
company. Further operational and organizational details will be
announced at closing.
“Consumers love using Zillow and Trulia to find vital
information about homes and connect with the best local real estate
professionals,” Rascoff said. “Both companies have been enormously
successful in creating compelling consumer brands and deep industry
partnerships, but it’s still early days in the world of real estate
advertising on mobile and Web. This is a tremendous opportunity to
combine our resources and achieve even more impressive innovation
that will benefit consumers and the real estate industry.”
“Trulia and Zillow have a shared mission and vision of
empowering consumers while helping real estate agents, brokerages
and franchisors benefit from technological innovation,” said Flint.
“By working together, we will be able to create even more value for
home buyers, sellers, and renters, as well as create a robust
marketing platform that will help our industry partners connect
with potential clients and grow their businesses even more
efficiently. Our two companies share complementary employee
cultures with innovative, consumer-first philosophies and a deep
commitment to create the best products and services for our
industry partners.”
Both Zillow and Trulia are primarily media companies, generating
the majority of revenue through advertising sales to real estate
professionals. Despite continued growth as public companies,
significant opportunities of scale remain as the majority of
advertising dollars in the real estate sector have yet to migrate
online or to mobile. For example, the two companies’ combined
revenue currently represents less than 4 percent of the estimated
$12 billion1 real estate professionals spend on marketing their
services to consumers each year.
Zillow and Trulia are two rapidly growing real estate sites on
mobile and the Web, enabling advertisers to reach a large and
expanding consumer base. In June, Zillow reported a record 83
million unique users across mobile and Web2. For the same month,
Trulia reported a record 54 million monthly unique users across its
sites and mobile apps3. The two brands have limited consumer
overlap – approximately half of Trulia.com’s monthly visitors do
not visit Zillow.com, and approximately two-thirds of Zillow.com’s
monthly visitors across all devices do not use Trulia.com4.
Maintaining the two distinct consumer brands will allow the
combined company to continue to offer differentiated products and
user experiences, attract more users and maximize the distribution
of free content across multiple platforms, apps and channels.
A summary of expected benefits of the deal, include:
- Faster Innovation. By combining
resources, the companies expect to accelerate innovation on mobile
and Web to provide more valuable tools and services to consumers
and professionals.
- Greater Access to Free Real Estate
Market Data. The companies expect to share real estate market
data, housing trend analysis, and forecasts to make more free data
available to consumers and real estate professionals to empower
people to make more informed decisions.
- Broader Distribution. Home
sellers and their agents, brokerages, and participating MLSs will
benefit from seamless free distribution of listings across even
more platforms to reach an even larger audience of consumers.
- Enhanced Value and ROI for
Advertisers. The companies expect to offer shared services and
marketing platforms for advertisers that enhance agent productivity
and marketing and deliver greater return on their investment.
- Corporate Cost Savings. By
operating independent consumer brands through one corporation, the
companies expect to realize synergies to improve overall
operational efficiency over the long-term. By 2016, management
expects to achieve at least $100 million in annualized cost
avoidances.
Transaction Details
As part of the agreement, Trulia shareholders will receive 0.444
shares of Class A Common Stock of Zillow, Inc.5 for each share of
Trulia, and will own approximately 33% of the combined company at
closing. Current Zillow holders of Class A Common Stock and Class B
Common Stock will receive one comparable share of the combined
company at closing, and will represent approximately 67% of the
combined company. The transaction assumes Trulia’s convertible
notes will be assumed by the combined company at closing. The value
of the deal represents a premium of 25% to Trulia’s closing price
on July 25, 2014.
The agreement is subject to the satisfaction of customary
closing conditions, including the expiration of U.S. antitrust
waiting periods and shareholder approval of both companies. Zillow
co-founders Rich Barton and Lloyd Frink, who control a majority of
the shareholder voting power of Zillow, have agreed to vote in
favor of the transaction. In addition, Trulia directors holding
7.4% of Trulia stock have entered into voting agreements with
Zillow to vote in favor of the transaction.
Representation
Goldman, Sachs & Co. acted as the exclusive financial
advisor, and Shearman & Sterling LLP and Perkins Coie LLP acted
as legal counsel to Zillow. J.P. Morgan Securities LLC acted as a
financial advisor, and Goodwin Procter LLP and Wilson Sonsini
Goodrich & Rosati acted as legal counsel to Trulia. Qatalyst
Partners LP also acted as a financial advisor to Trulia.
Conference Call to Discuss Acquisition
at 9 a.m. EDT / 6 a.m. PDT
Zillow CEO Spencer Rascoff will host a conference call today
with Trulia CEO Pete Flint at 9:00 a.m. EDT / 6:00 PDT. The live
webcast of the conference call will be available on the investor
relations section of Zillow, Inc.'s website
at http://investors.zillow.com/, or on the investor relations
section of Trulia, Inc’s website at
http://ir.trulia.com/. For those
without access to the Internet, the call may be accessed toll-free
via phone at 877-643-7152 with conference ID# 80954780.
Callers outside the United States may dial 443-863-7921
with conference ID# 80954780. Following completion of the
call, a recorded replay of the webcast and a copy of the prepared
remarks will be available on the investor relations section
of Zillow, Inc.'s and Trulia.com’s websites for one
year.
Company Conference Calls for Quarterly
Earnings
The companies will host separate conference calls to discuss
each company’s second quarter results. The calls will be held on
the following dates:
- Trulia: July 31, 2014, at 5 p.m. EDT
/ 2 p.m. PDT. The call details will be available announced
separately, and will be available on Trulia’s investor relations
website at ir.trulia.com.
- Zillow: August 5, 2014 at 5 p.m. EDT
/ 2 p.m. PDT. The call details will be announced separately,
and will available on Zillow’s investor relations website at
investors.zillow.com.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 that involve
risks and uncertainties, including, without limitation, statements
regarding Zillow’s proposed acquisition of Trulia and the expected
benefits of the transaction; operational and organizational details
of the combined company; the way in which the transaction will
impact consumers, real estate professionals, and industry partners;
the ability of the combined company to innovate; our ability to
realize opportunities of scale; the migration of advertising
dollars in the real estate sector to online and mobile; the growth
rate of Zillow and Trulia; and our ability to deliver greater
return on investment to our advertisers. Statements containing
words such as “may,” “believe,” “anticipate,” “expect,” “intend,”
“plan,” “project,” “will,” “projections,” “estimate,” or similar
expressions constitute forward-looking statements. Such
forward-looking statements are subject to significant risks and
uncertainties and actual results may differ materially from the
results anticipated in the forward-looking statements. Factors that
may contribute to such differences include, but are not limited to,
the risk that expected cost savings or other synergies from the
transaction may not be fully realized or may take longer to realize
than expected; the risk that the businesses may not be combined
successfully or in a timely and cost-efficient manner; the
possibility that the transaction will not close, including, but not
limited to, due to the failure to obtain shareholder approval or
the failure to obtain governmental approval; and the risk that
business disruption relating to the merger may be greater than
expected. The foregoing list of risks and uncertainties is
illustrative, but is not exhaustive. Additional factors that could
cause results to differ materially from those anticipated in
forward-looking statements can be found under the caption “Risk
Factors” in Zillow’s Annual Report on Form 10-K for the year ended
December 31, 2013, Trulia’s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2014, and in Zillow’s and Trulia’s
other filings with the Securities and Exchange Commission. Except
as may be required by law, neither Zillow nor Trulia intend, nor
undertake any duty, to update this information to reflect future
events or circumstances.
Additional Information and Where to
Find It
In connection with the proposed transaction, Zillow and Trulia
will file a joint proxy statement/prospectus with the Securities
and Exchange Commission, and the new holding company will file a
Registration Statement on Form S-4 with the Securities and Exchange
Commission. INVESTORS AND SECURITYHOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) REGARDING THE
PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. Investors and security holders will
be able to obtain free copies of the registration statement and
joint proxy statement/prospectus (when they become available) and
other documents filed by Zillow and Trulia at the Securities and
Exchange Commission’s web site at www.sec.gov. Copies of the
registration statement and joint proxy statement/prospectus (when
they become available) and the filings that will be incorporated by
reference therein may also be obtained, without charge, from
Zillow’s website, www.zillow.com, under the heading “Investors” in
the “About” tab or by contacting Zillow Investor Relations at (206)
470-7137. These documents may also be obtained, without charge,
from Trulia’s website, www.trulia.com, under the tab “Investor
Relations” or by contacting Trulia Investor Relations at (415)
400-7238.
Participants in
Solicitation
The respective directors and executive officers of Zillow and
Trulia and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information regarding Zillow’s directors and executive officers is
available in its proxy statement filed with the SEC by Zillow on
April 17, 2014, and information regarding Trulia’s directors and
executive officers is available in its proxy statement filed with
the SEC by Trulia on April 22, 2014. Other information regarding
the participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC (when they become available). These documents can be
obtained free of charge from the sources indicated above.
About Zillow, Inc.
Zillow, Inc. (NASDAQ:Z) operates the leading real estate and
home-related information marketplaces on mobile and the Web, with a
complementary portfolio of brands and products that help people
find vital information about homes, and connect with the best local
professionals. Zillow's brands serve the full lifecycle of owning
and living in a home: buying, selling, renting, financing,
remodeling and more. In addition, Zillow offers a suite of tools
and services to help local real estate, mortgage, rental and home
improvement professionals manage and market their businesses.
Welcoming 83 million unique users in June 2014, the Zillow, Inc.
portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgage
Marketplace, Zillow Rentals, Zillow Digs®, Postlets®, Diverse
Solutions®, Agentfolio®, Mortech®, HotPads™, StreetEasy® and
Retsly™. The company is headquartered in Seattle.
Zillow.com, Zillow, Postlets, Mortech, Diverse Solutions,
StreetEasy, Agentfolio and Digs are registered trademarks of
Zillow, Inc. HotPads and Retsly are trademarks of Zillow, Inc.
About Trulia, Inc.
Trulia (NYSE: TRLA) gives home buyers, sellers, renters and real
estate professionals all the tools and valuable information they
need to be successful in the home search process. Through its
innovative mobile and web products, Trulia provides
engaged home buyers and sellers essential information about the
house, the neighborhood and the process while connecting them with
the right agents. For agents, Trulia, together with
its MarketLeader subsidiary, provides an end-to-end technology
platform that enables them to find and serve clients, create
lasting relationships and build their business. Founded in 2005,
Trulia is headquartered in San Francisco with offices in New York,
Denver and Seattle. Trulia and the Trulia marker logo are
registered trademarks of Trulia, Inc.
1 Source: Borrell Associates Real Estate Advertising 2013
Outlook, reflecting combined advertising spent by real estate
agents, home builders, and rental property managers.2 Zillow
measures unique users with Google Analytics.3 Source: Omniture,
Google Analytics, June 20144 Source: comScore Multiplatform
Cross-Visiting, June 20145 Upon closing, shares of Zillow, Inc. and
Trulia, Inc. common stock will be exchanged for common stock of a
newly formed holding company.
ZILLOW CONTACTS:Katie Curnutte, 206-757-2785Media
relationspress@zillow.comorRaymond Jones, 206-470-7137Investor
relationsir@zillow.comorTRULIA CONTACTS:Matt Flegal,
415-400-7307Media relationspr@trulia.comorIan Lee,
415-400-7238Investor relationsir@trulia.com
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