Acquisition
GUS PLC
14 December 2005
14 December 2005
GUS plc
Acquisition of PriceGrabber.com
GUS plc, the retail and business services group, today announces that Experian
has acquired PriceGrabber.com, a leading provider of online comparison shopping
services in the US. PriceGrabber.com operates in fast-growing markets and
complements Experian's existing operations connecting consumers to companies
over the Internet. The purchase price is $485m plus expenses and was funded from
GUS' existing bank facilities.
Don Robert, Chief Executive Officer of Experian, commented:
'As a trusted and preferred comparison shopping destination, PriceGrabber.com
has a leading position in a fast-growing market. When combined with the
complementary skills, expertise and scale of Experian, in both Interactive and
Marketing, we are very excited about the future growth prospects for
PriceGrabber.com.'
Description of PriceGrabber.com
Founded in 1999, PriceGrabber.com is a leading provider of online comparison
shopping services in the US. It is based in California, employs 140 people and
has been privately held. Its website enables consumers instantly to obtain free
and unbiased information before making a purchase decision. Its database
contains millions of products in over 20 categories such as consumer
electronics, photography, computers, home and garden and apparel. Consumers can
then find the retailer or seller which provides the most attractive offer.
PriceGrabber.com connects its online shoppers to over 9,000 merchants of all
sizes, from large traditional retailers to smaller local sellers. These
merchants pay PriceGrabber.com for each lead (or each consumer directed) to the
retailer's own website. PriceGrabber.com also powers comparison shopping on over
300 websites, including About.com, Ask Jeeves, Bell South, Comcast and MSN.
In November 2005, PriceGrabber.com provided comparison shopping services to over
17 million unique visitors. Through continued innovation and consistent focus on
providing the best comparison shopping experience for consumers on the Internet,
PriceGrabber.com has established itself as a trusted and effective online
destination for Internet shoppers. Its service to consumers offers a wealth of
options and information about the products and retailers, with user and expert
reviews, generating high customer loyalty.
For the 12 months to December 2005, PriceGrabber.com estimates that sales will
be $60m and EBIT $25m, representing an increase of about 50% over the previous
year.
Rationale for acquisition
The acquisition of PriceGrabber.com further strengthens Experian's position in
connecting consumers to companies over the Internet. In the six months to 30
September 2005, Experian Interactive contributed about one-third of sales in
Experian North America and grew by nearly 40% excluding acquisitions. Experian
believes that it can enhance the competitive position of PriceGrabber.com by
sharing scale and expertise in Internet marketing, by using Experian's data and
analytics to improve the services offered to consumers and by providing its
retail clients with another channel to sell to consumers.
PriceGrabber.com operates in high growth markets. The comparison shopping
services market in the US was worth about $400m in 2004, with market projections
for growth of around 40% per annum over the next five years. This growth
reflects increasing use of the Internet by consumers to research and acquire
goods and services, driven in part by greater broadband penetration. The use of
comparison shopping services by online shoppers is also growing as consumers
benefit from the value these sites deliver. To reach these shoppers, companies
are advertising more online, especially as the return on investment from online
advertising is often superior to that from traditional channels.
PriceGrabber.com has strong organic growth opportunities. As well as benefiting
from the natural growth in its established markets, PriceGrabber.com is
expanding its presence in new vertical markets such as auto, travel and
wireless. It also has significant international development opportunities as
illustrated by its nascent operations in the UK and Canada.
PriceGrabber.com complements Experian's Marketing Solutions. Retail and
catalogue shopping is the second largest vertical market for Experian globally.
Excluding Experian Interactive, it accounts for about 17% of Experian North
America sales. The acquisition of PriceGrabber.com will strengthen Experian's
presence in this important sector by giving its retail and catalogue clients
another channel to market, complementing the current multi-channel offer (direct
mail, email via CheetahMail and online lead generation via MetaReward).
There are further synergies available from combining Experian and
PriceGrabber.com, especially as the latter can benefit from Experian's
substantial Internet marketing expertise and scale. These include the ability to
generate more traffic at low cost by encouraging consumers to visit other
Experian Interactive websites (Consumer Direct, LowerMyBills.com, MetaReward,
ClassesUSA.com and Affiliate Fuel). PriceGrabber.com also expects to be able to
improve the quality of leads referred to retailers' websites by adding Experian
data and analytics where appropriate.
Enquiries
GUS
Don Robert Chief Executive Officer, Experian 020 7495 0070
David Tyler Group Finance Director
Fay Dodds Director of Investor Relations
Finsbury
Rupert Younger 020 7251 3801
Rollo Head
GUS announcements are available on www.gusplc.com.
There will be conference calls today at 10am and 3pm UK time to discuss this
transaction. Slides accompanying this call can be either downloaded or viewed
live in conjunction with the conference calls by visiting www.gusplc.com. A
recording of the calls will also be available later in the day on the website.
This information is provided by RNS
The company news service from the London Stock Exchange
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