Shareholders in Purplebricks have voted to sign off the company’s deal with German media giant Axel Springer, enabling the Berlin-based company to invest £125 million in the hybrid estate agent.
Some 27.7 million ordinary shares in Purplebricks worth £100 million will now be issued and allotted to Axel Springer by the directors of the hybrid agency.
This money will be spent on accelerating its fast-moving roll-out in the US, supporting entry into new markets – which is likely to mean in the Europe where Axel Springer is a player in the portal market – and also fund an upgrade of its digital CRM and property search systems.
Purplebricks vendor marketing
The cash injection will also be spent on new tech to offer “additional advertising and marketing options for sellers”.
The agency won’t expand on what this means, but this could include offering vendors Google or other online marketing options, or Purplebricks enhancing its offer as a rival to Zoopla and Rightmove.
Yesterday’s shareholder sign-off now means Axel Springer has an 11.5% stake in Purplebricks, paid for at £3.60p a share, a 15.8% premium on its current share price.
The remaining £25 million of the German company’s investment has been spent on buying seven million shares off from Michael Bruce, his brother Kenny and non-exec director William Whitehorn. The rest is likely to have been swallowed up by the transactions’ legal costs.
Whitehorn joined as a non-exec in 2013 in order to beef up Purplebricks’ board with his high-level experience at several blue chip companies including train and bus operator Stagecoach – crucial during the early years before it launched.
“The Board believes that this is a major strategic advance for the Company and that Axel Springer’s expertise and funding should enable Purplebricks to achieve its strategic goals and global ambition more quickly and effectively,” a spokesperson said.