Fairfax is betting big on the real estate market, signing a deal with Melbourne-focused real estate publisher Metro Media Publishing Holdings (MMPH) to acquire the player in a deal worth $72 million.
The Fairfax Group already had a 50% stake in the real estate publishing company, with the deal to be a combination of shares and cash, effectively valuing the group at $144 million.
MMPH currently has 15 weekly premium real estate and lifestyle-focused magazines in the Victorian market, and a digital property at www.reviewproperty.com.au.
Titles under the group reportedly reach one million households in Melbourne and Geelong every week, with earnings from the titles growing from $2 million in the 2012 financial year to $14 million in the 2014 financial year.
The new deal signals Fairfax's intent to focus on profitable parts of the business, with CEO Greg Hywood telling shareholders that this may not be the end of the expansion of Fairfax's property-focused business.
“Domain is continuing its aggressive national expansion,” he told shareholders. “The consolidation of the balance of the equity in MMPH simplifies the operations of our fast-growing property services businesses, which have more than $300 million in real estate revenue.”
Fairfax has increasingly focused on real estate, with it acquiring data and mapping provider Property Data Solutions in December 2013 and Canberra-focused Allhomes in July last year.
“The Domain group is growing strongly, delivering revenue growth of 21% in the first four months of FY15 across its broad suite of digital, print, software and data products servicing the residential and commercial real estate markets,” Hywood said.
About 68.5 million new Fairfax shares will be issued as part of the deal. Fairfax shares are up 3.74% to 90c on the back of the deal.
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