ZPG buys Dutch valuation firm Calcasa in £27m deal
ZPG Plc
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16:59 11/07/18
Property and household-related digital brands owner ZPG has agreed to acquire Netherlands-based automated property valuation and statistical market analysis firm Calcasa for €30m (£26.5m), it announced on Wednesday, on a cash-free, debt-free basis.
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The FTSE 250 company said the acquisition also included a performance-based earn-out of up to €50m, with completion of the acquisition expected to take place on 1 December.
It said Calcasa, established in 2005, is the “leading automated valuation model” and residential property market insights provider in the Netherlands.
The acquisition would include the largest property database of more than 10 million unique price points, as well as services including property valuation and risk analysis to more than 100 key stakeholders in the Dutch housing market including mortgage lenders, brokers, investors, surveyors, estate agents, developers, validation institutes, housing corporations, pension funds, government agencies, regulatory institutions, research companies and real estate funds.
ZPG said its purchase of Calcasa would create the largest residential property valuation database in Europe, building on Hometrack's leading position in the UK and Australia as an international property data platform.
“The combination brings together two of the best European modelling teams and property data solutions, creating significant opportunities by further enhancing our data expertise, product capabilities and partner relationships,” the ZPG board claimed in its statement.
ZPG said Calcasa's “market-leading” automated valuation model was already deeply integrated into the valuation processes of the Netherland's top 10 lenders, and had a track record of more than a decade in the Dutch mortgage and real estate markets.
Its model had been analysed by the European Central Bank, Dutch Central Bank and the major ratings agencies, and its quarterly house price index was a “trusted publication” on the state of affairs in the Dutch property market that received national and local media coverage.
Calcasa had a “strong” financial track record, ZPG added, with a subscription revenue model underpinned by long-term contracts with more than 70% of revenues recurring.
The transaction was expected to be earnings and margin enhancing on an adjusted basis in the first full year.
Calcasa has a team of 15 based in Delft, Netherlands, and following completion it would continue to operate as a standalone brand and platform led by its founders Evert Van de Wauwer and Bas Meeuwissen, who would be remaining with the business.
Looking closer at the financials, ZPG said the transaction was to be funded through its own cash and the extension of existing credit facilities.
Transaction costs were to be around £0.3m in the 2018 financial year, with an acquired amortisation charge of around £2.5m per annum.
Calcasa generated €5.0m in profit before tax in the year to 31 December 2016, with the value of Calcasa's gross assets £5.5m as at that date.
“We are delighted to announce the acquisition of Calcasa,” said ZPG founder and CEO Alex Chesterman.
“The combination of Hometrack and Calcasa will give us unrivalled capabilities as an international property data platform and there is a clear opportunity to leverage our complementary products and relationships.”
Chesterman said the acquisition was “another example” of a transaction that fit with ZPG’s strategy.
“Calcasa is a market leading business that we know well with strong underlying growth and which we believe will be even stronger under our ownership.
“And we are buying the business at a price that is accretive to our shareholders.”
Evert Van de Wauwer, CEO of Calcasa, added that his company was “very excited” to become part of the wider ZPG business.
“We know the Hometrack team well and our combined data and enhanced products and services will deliver even more value to our partners.
“We are looking forward to helping to build on ZPG's data capabilities and further develop its international presence as the market leader for residential property data analytics,” Van de Wauwer explained.
In a separate announcement on Wednesday, Zoopla reported that recent acquisitions and a focus on its comparisons division had boosted it to a solid set of full-year numbers.