The £80mln payment to acquire Dot Zinc Limited is on a cash-free, debt-free basis. The deal also includes an earn-out of up to £60mln based on adjusted underlying earnings (EBITDA) over the next year.
ZPG, which also owns uSwitch, PrimeLocation and Hometrack, said it expects the deal to be earnings enhancing on an adjusted basis in the first full year. It said Money.co.uk is “highly complementary” to ZPG's uSwitch, a UK price comparison website for energy, personal finance and insurance.
ZPG will use existing cash resources and a £50mln extension to its current credit facilities to fund the acquisition.
Money.co.uk will continue to operate as a standalone brand and platform after completion, which is subject to approval by the Financial Conduct Authority. The firm’s chief executive Chris Morling will retain his position.
“Adding Money, one of the UK's leading financial services comparison websites, to our existing brand portfolio will further enhance our product capabilities and consumer engagement across both our comparison and property platforms,” said Alex Chesterman, ZPG’s founder and chief executive.
“Broadening our financial services offering has long been a key part of our strategy and I look forward to welcoming Chris and his team to the ZPG family."
In the year ended 31 October 2016, Money.co.uk generated revenues of £24.7mln with an adjusted EBITDA of £8mln.
On completion, ZPG will maintain its current dividend policy of 35%-45% pay-out ratio of the enlarged company's profit after tax. Deal-related exceptional costs are expected to be £2.5mln.
ZPG added that it expects revenues and adjusted EBITDA for the financial year ending 30 September to be towards the top end of market expectations.
Shares gained 4.03% to 368.90p in morning trading.