OnTheMarket Limited (to be re-registered as OnTheMarket plc), the agent-backed company which operates the OnTheMarket.com property portal, has announced its intention to list on the AIM market of the London Stock Exchange.
As previously announced on 4 August 2017, OnTheMarket plc will seek to offer a minority stake to investors as part of the IPO with OnTheMarket's entire issued and to be issued share capital being admitted to trading on AIM. The objective is to raise approximately £50 million of new equity capital which will be used to fund the growth of OnTheMarket, already the third biggest UK residential property portal provider in terms of traffic.
The Company has engaged Zeus Capital as Financial Adviser and Broker to manage a proposed Placing and IPO.
A substantial portion of the funds raised will be committed to support broad marketing campaigns through television, digital, local radio and poster and press advertising, in addition to increased PR and social media activity. Funds will also be committed to the expansion of the Group's sales and customer relationship management organisation and its technology development capacity. This will underpin the strategy to not only attract more estate agents and other property advertisers to use the portal but also to grow the levels of traffic and engagement with property-seekers.
A key part of the Group's growth strategy involves implementing appropriate incentives for agents to make a long-term commitment to list their properties on the portal and the rapid building of its agency branch base. This will be achieved in part through offering equity participation following Admission to selected new agents alongside long-term listing agreements, with arrangements in place to restrict agents from the short-term sale of any such shares and to align their interests as shareholders with the success of the Group.
As recently announced, OnTheMarket has signed long-term listing agreements with leading estate agencies and property services providers, Arun Estates, Chancellors Group and Hunters Property Group plc. The agreements are conditional upon and will take effect from, an IPO taking place. In aggregate, the branch networks of Arun Estates, Chancellors Group and Hunters Property Group plc amount to over 350 branches.
The issuance of new shares to recruit key new advertisers is expected to result in both direct and indirect revenue growth.
Ian Springett, Chief Executive of Agents' Mutual, said: "We have made good progress against our plans first announced earlier this year. Our demutualisation received overwhelming support from members, and more recently we have signed new long-term listing agreements with a number of leading estate agencies and property services providers. We are now well placed to list and raise new funds to challenge the two leading incumbent portals. We are excited about this new chapter in OnTheMarket's development, which will strengthen our market position, and benefit our agents, investors, and consumers using our services."
Launched in January 2015, the OnTheMarket.com property portal was created by Agents' Mutual Limited, a company limited by guarantee and founded in January 2013 by a small group of agent firms, with the objective of creating a new portal to challenge the dominance of Rightmove and Zoopla. Both groups were felt to be using their strong positions relative to their agent customers to impose significant price increases for their portal services.
The Agents' Mutual proposition of an agent-backed portal offering a premier search service to consumers whilst charging fair prices to agents quickly found support among a very wide group of leading independent agents across the UK. These firms funded the venture by way of loan note subscriptions and committed to list with the portal once it went live.
After only two full years of operations, OnTheMarket is already the third biggest UK residential property portal provider in terms of traffic and has, with backing from its agent owners, developed unique sources of competitive advantage such as the "New and Exclusive" property listings.
In order for the IPO to proceed, Agents' Mutual asked its members to vote in favour of a resolution to convert their membership interests in Agents' Mutual into ordinary shares in a new company, OnTheMarket Limited (to be re-registered as OnTheMarket plc as part of the IPO). Holders of loan notes were also asked to vote in favour of resolutions exchanging their loan notes in Agents' Mutual for convertible loan notes in OnTheMarket. All resolutions were passed with a large majority and each of the schemes of the arrangement were sanctioned by the Court on 11 September 2017.
The Board believes that the proposed changes and the planned IPO provide the opportunity for a transformational step-change in the portal's position and for the development of new consumer and agent products and services and the targeting of revenues from new segments of the property market and new strategic partnerships.
Zeus Capital Limited is authorised and regulated by the Financial Conduct Authority and its registered address is 82 King Street, Manchester M2 4WQ.
SOURCE OnTheMarket
