The 海角视频’s largest property website Rightmove has snapped up a Newcastle tenant checking company in a £20m deal, as part of moves to cater for the “under-served” rental marketplace.
Rightmove has acquired 100% of the share capital of Van Mildert, a company that provides tenant referencing services and rent guarantee insurance products, saying the firm has a “strong brand and is well positioned within the rental marketplace”.
Van Mildert’s technology means letting agents can order, track and receive tenant references at the click of a button from its lettings software. Its products work through leading 海角视频 software providers.
Rightmove wants to tap into the Tyneside’s firm’s experience to help grow its online tenants’ hub, called Rightmove Tenant Passport – an online hub for renters’ profiles, created by tenants to include everything they need to rent which is shared with agents they find on Rightmove.
The deal involves an initial cash consideration of £16m as well as a deferred payment, capped at £4m, which will be paid out at the end of 2021, subject to the firm’s sales performance from January 2020 to December 2021.
The acquisition comes two years after the firm, which was launched 10 years ago, received a multimillion-pound private equity investment to fuel its growth, leading to job creation as well as sales and profit growth.
The firm, which has doubled in size over the last four years, saw sales and profits increase by 19% in latest accounts, posting revenues of £3.6m and pre-tax profit of £1.4m for the year ended November 30 2018.
Van Mildert’s founder, Christian Balshen – a former professional rugby player who played for Newcastle Falcons, Swansea and Bath – will continue to lead the 70-strong Van Mildert team from its base in Camperdown.
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Mr Balshan said: “First and foremost this is a great thing for the business and is really going to support the growth in our business, and from an industry perspective Rightmove’s Tenant Passport can really work very well in the lettings industry for tenants and we are very happy to be a part of it.”
Peter Brooks-Johnson, CEO of Rightmove said: “We’re looking forward to welcoming Van Mildert, a highly respected tenant referencing company, to the Rightmove family.
“We believe the combination of Rightmove’s unrivalled reach and Van Mildert’s products and operational experience will augment the Rightmove Tenant Passport, helping in our quest to make renting a property faster, easier and more efficient for tenants, landlords, and agents alike.”
The acquisition is expected to enhance Rightmove’s earnings per share in the first full year of ownership, and the deal itself is subject to FCA change of control regulatory approval. The firm said the deal should complete by the end of October.
Van Mildert was advised by Newcastle’s Ryecroft Glenton (RG) corporate finance team.
The firm’s head of corporate finance Carl Swansbury said: “This acquisition marks an important milestone in the growth of Van Mildert, which RG Corporate Finance has supported for more than seven years.
“Working closely with Christian and his team we have seen how the business is fulfilling its potential making it attractive to investors, initially through private equity and now with this acquisition by Rightmove, which can deliver increased opportunities and market share for the company.”
Additional tax advice has been provided by Field Fisher with legal advice from Katherine Hay-Heddle, corporate partner at Ward Hadaway.