Zillow announced it has bought Trulia in a stock-for-stock transaction. In a press release, an announcement was made that Zillow acquired Trulia in a definitive agreement for $3.5 billion in a stock-for-stock transaction.
The two companies will remain separate entities, though real estate agents will be able to advertise on both sites and gain access to combined tech efforts, the company’s CEOs said this morning.
Trulia CEO Pete Flint will maintain his position and report to Zillow CEO Spencer Rascoff.
According to a press release, maintaining the two distinct consumer brands will allow the companies to continue to offer differentiated products and user experiences, attract more users and maximize the distribution of free content across multiple platforms, apps and channels.
Mobile has been a big focus for Trulia and Zillow with home buyers beginning their searches on smartphones and tablets. Trulia claimed 54 million unique mobile users in June and Zillow said it had 83 million unique mobile users.
“Consumers love using Zillow and Trulia to find vital information about homes and connect with the best local real estate professionals,” Zillow CEO Spencer Rascoff said. “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.”
While consumers have shifted to mobile, real estate marketers have not. Trulia and Zillow cite a combined revenue of $480 million of the real estate industry’s total $12 billion annual spend. The companies make the bulk of their revenue from charging advertisers to post their listings on the site.
Trulia shareholders will receive 0.444 shares of Class A Common Stock of Zillow for every Trulia share they own. Trulia shareholders will own about a third of the combined company. The value of the deal is a 25% premium on Trulia’s Friday closing price of $56.35.
“This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry,” Rascoff said in a release.
The deal is expected to close in 2015.