Zillow To Buy Smaller Rival Trulia In $3.5 Bln Stock Deal

(RTTNews) - Real estate information website Zillow, Inc. (Z) agreed Monday to acquire smaller rival Trulia, Inc. (TRLA) in a stock-for-stock deal valued at about $3.5 billion. The deal, approved by the boards of directors of both companies, is expected to close in 2015.

Following the closure of the deal, Zillow shareholders will own about 67 percent of the combined company, while Trulia shareholders will own about 33 percent.

"Consumers love using Zillow and Trulia to find vital information about homes and connect with the best local real estate professionals. Both companies have been enormously successful in creating compelling consumer brands and deep industry partnerships, but it's still early days in the world of real estate advertising on mobile and Web," Zillow CEO Spencer Rascoff said.

The deal will see San Francisco, California-based Trulia's shareholders receiving 0.444 shares of Class A Common Stock of Zillow, for each share of Trulia, while the current Zillow holders of Class A Common Stock and Class B Common Stock will receive one comparable share of the combined company at closing.

Seattle, Washington-based Zillion noted that the value of the deal represents a premium of 25 percent to Trulia's closing price of $56.35 on Friday.

The closure of the deal is primarily subject to shareholder approval of both companies and expiration of U.S. antitrust waiting periods.

Zillow stated that its co-founders Rich Barton and Lloyd Frink, who control a majority of the shareholder voting power of Zillow, have agreed to vote in favor of the deal. Additionally, Trulia directors holding 7.4 percent of Trulia stock have entered into voting agreements with Zillow to vote in favor of the deal.

Zilliow noted that it will maintain both the Zillow and Trulia consumer brands, with current Trulia CEO Pete Flint continuing to head Trulia and report directly to Rascoff. Flint will also join the board of directors of the combined company. Zillow has also provided for a second member of Trulia's board of directors to join the board of the combined company at closing.

Zillow and Trulia are two rapidly growing real estate sites on mobile and the Web, enabling advertisers to reach a large and expanding consumer base.

Zilliow said maintaining the two distinct consumer brands will allow the combined company to continue to offer differentiated products and user experiences as the two brands have limited consumer overlap. About half of Trulia.com's monthly visitors do not visit Zillow.com, while about two-thirds of Zillow.com's monthly visitors across all devices do not use Trulia.com.

"Trulia and Zillow have a shared mission and vision of empowering consumers while helping real estate agents, brokerages and franchisors benefit from technological innovation. By working together, we will be able to create even more value for home buyers, sellers, and renters, as well as create a robust marketing platform that will help our industry partners connect with potential clients and grow their businesses even more efficiently," Flint stated.

In Monday's regular trading session, Z is currently trading at $153.38, down $5.48 or 3.45% on a volume of 0.83 million shares, while TRLA is trading at $63.35, up $7.00 or 12.42% on a volume of 1.42 million shares.