Zillow (Z), the real estate information site, will acquire Trulia for $3.5 billion in an all-stock deal, the company announced Monday.
Trulia shareholders will receive 0.44 shares of Zillow common stock per share and will own about 33% of the combined company at closing. The deal represents a 25% premium to Trulia’s closing price on Friday.
Zillow plans to maintain both consumer-facing brands, which offer online access to information about homes and real estate for free, as well as advertising and software solutions for real estate professionals.
“It’s still early days in the world of real estate advertising on mobile and web,” Spencer Rascoff, CEO of Zillow, said in a statement. “This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry.”
Both sites rely on advertising sales to generate the majority of revenue, essentially operating as media companies. Rascoff and Flint both believe there are further opportunities of scale as a majority of real estate advertising dollars have yet to migrate online, or to mobile.
The two brands attract separate customer bases. About half of Trulia’s monthly visitors don’t visit Zillow and nearly two-thirds of Zillow visitors each month don’t cross over to Trulia. Both sites will continue to operate separately in order to play off the appeal across different consumer groups, the companies said.
Trulia’s CEO Pete Flint will stay on to continue running the business, reporting to Rascoff, and will join the board of directors of the combined entity.