Wall Street Journal publisher News Corp. has agreed to pay $950 million to buy Move Inc., scooping up an online company that aims to connect real estate professionals with potential home buyers.
Under the terms of the deal, Rupert Murdoch’s News Corp. (NWSA) agreed to pay $21 per share for all outstanding shares of Move, a deal that is worth roughly $844 million based on the amount of shares Move had outstanding in July (News Corp.’s figure is net of Move’s existing cash balances). The price News Corp. is offering is a roughly 37% premium to Move’s (MOVE) closing price on Monday.
News Corp. Chief Executive Robert Thomson said the deal will bolster the company’s digital business, adding he expects News Corp. will use its media platforms and 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.
Move’s websites include realtor.com, move.com and seniorhousingnet.com. The company has more than 20 million monthly visitors, and has local and national advertising pacts with more than 400,000 real estate professionals. Move’s revenue for the first six months of 2014 climbed 6.8% to $119.3 million from the year-earlier period, though the company swung to a net loss due to higher sales and marketing spending.
Though fairly small, News Corp. sees a lot of growth potential for Move. It points out that more than five million homes in the U.S. are bought and sold each year, representing more than $1 trillion in annual transaction volume. Agents and brokers, meanwhile, are expected to spend about $14 billion this year on marketing homes, with an additional $11 billion to be spent by mortgage providers.