Purplebricks watch out – rivals eMoov and Tepilo are reported to be in merger talks that will see them join forces to create a more credible competitor which will be then floated on AIM.
Sky News yesterday evening revealed that the two companies are in an ‘advanced state’ of negotiations and were planning to acquire an unnamed third estate agency as part of the deal, valuing the total entity at over £100m.
Investment bank Cenkos Securities has been lined up to take the merged company, which would operate the Tepilo and eMoov brands separately, to an IPO.
Candidates for the mystery third party agency include fellow online agents HouseSimple and EasyProperty – the only other hybrid agents yet to be bought up by traditional agency corporates.
The deal is also being backed by Channel 4 via its Commercial Growth Fund, which – for the second time in 24 hours – is offering the merged companies an equity-for-media deal.
As we also report today, estate agent comparison website GetAgent has also struck a similar deal with Channel 4.
The deal between eMoov and Tepilo, which was founded by TV presenter Sarah Beeny and backed by former Daily Express owner Richard Desmond, is an inevitable response to the dominance of Purplebricks within the hybrid agency sector.
Currently claiming to have three quarters of the online market, Purplebricks’ competitors have no hope of taking it on and prising market share of it unless the consolidate.
Collaboration between two industry players has clearly been on eMoov CEO Russell Quirk’s mind – a few weeks ago he made his admiration for the Sainsburys and Asda deal with Ocado known for its ability to “deliver technology and become a truly unassailable multi-channel retailer”, he said on Twitter last week.