News Corp to Acquire Online Real Estate Firm Move for $950 Million
The company says the biggest deal since the Fox split will make online real estate "a powerful pillar of our portfolio”
Rupert Murdoch's publishing company News Corp said on Tuesday that it has agreed to acquire online real estate firm Move for $950 million in cash as it continues to push into new fields to diversify its revenue streams beyond the newspaper business.
The price tag for the company's biggest deal since its separation from Murdoch's entertainment conglomerate 21st Century Fox amounts to a per-share price of $21, a premium of 37 percent over Move’s Monday closing stock price. Earlier this year, the publishing giant agreed to buy romance novel publisher Harlequin for $415 million in cash.
REA Group Ltd., which News Corp controls via a 61.6 percent stake and which operates Australian residential property site realestate.com.au, will take a 20 percent stake in Move for about $200 million, with News Corp directly owning the other 80 percent.
Move displays more than 98 percent of all for-sale properties listed in the U.S., with its websites reaching approximately 35 million people per month, the companies said. "Move’s content advantage makes it well positioned to capitalize on the fast-growing U.S. online real estate sector and the world’s largest residential real estate market," they said.
"This acquisition will accelerate News Corp's digital and global expansion and contribute to the transformation of our company, making online real estate a powerful pillar of our portfolio,” said News Corp CEO Robert Thomson who has signaled an interest in the acquisition of digital companies. “We intend to use our media platforms and compelling content to turbo-charge traffic growth and create the most successful real estate website in the U.S."
In addition to boosting Move’s subscription, advertising and software services, "this acquisition will give News Corp a significant marketing platform for our media assets, which will benefit from the high-quality geographic data generated by real estate searches,” said Thomson. “We certainly expect this deal to amount to far more than the sum of the parts.”
For 2013, Move reported $227 million in revenue and $29 million in adjusted operating cash flow. Move will become an operating business of News Corp, but remain headquartered in San Jose, Calif. The company, started in 1993, has 913 employees.