LDC reaps 2.4x on uSwitch exit to Zoopla after two years

LDC will initially reap a 2.4x return less than two years after its initial investment, equating to an IRR of 69%.

The transaction will be structured as £142.6m in cash on completion, with a further total of £17.4m payable to LDC, Forward and management over a two-year period. The deal also includes a performance-based earn-out of up to £30m.

Under LDC's tenure, the business has primarily focused on expanding its energy division, as well as investing in its mobile, broadband and financial services offerings.

The deal, which is expected to receive regulatory approval in June, brings LDC's total exit revenues to £225m since the beginning of 2015.

Online property platform Zoopla stated the acquisition forms part of its strategy to provide a broader spectrum of data-driven products to customers moving home.

The transaction, which values uSwitch at 9.9x EBITDA, will primarily be funded by a £150m debt package, with the remainder being drawn from Zoopla's balance sheet.

Zoopla was previously backed by VCs including Atlas Venture and Octopus Investments. The business held an IPO in June 2014, which gave it a market cap of £918.8m and generated proceeds of £369.9m.

Previous funding
LDC backed the management buyout of uSwitch from Forward in August 2013. The vendor, which retained a significant minority stake as part of the deal, originally invested in 2009.

According to unquote" data, uSwitch previously received £2m in funding from E-Capital Investment in September 2000.

Company
London-headquartered price comparison platform uSwitch was founded in 2000. The company generated a turnover of £62.9m in 2014 and EBITDA of £16.2m, up from £43.5m and £13.1m, respectively, in 2012.

People
Chris Hurley is CEO of LDC. Steve Weller is CEO of uSwitch. Alex Chesterman is CEO of Zoopla.

Advisers
Vendor – Lincoln International (Corporate finance); CMS Cameron McKenna (Legal).
Acquirer – Torch Partners, Rupert Robson, Tom Roberts, Chad Langley, Bob Thomas (Corporate finance); Jefferies, Paul Nicholls, Ben Bailey, Max Jones (Corporate finance).
Company – Lincoln International, Darren Redmayne, Julian Tunnicliffe (Corporate finance).

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• Topics
• Exits
• UK / Ireland
• Consumer
• United Kingdom
• LDC