Future, the magazine publisher, has announced a deal to buy price comparison website GoCompare’s parent company GoCo in a £594m valuation.
The deal values GoCo at 136p a share. GoCo shareholders will get 0.052497 new Future shares and 33p in cash for each of their shares.
Future said the acquisition will strengthen its ability to meet a growing consumer demand for informed and value-driven buying decisions, driven by content that attracts readers looking for new insurance deals, for example.
The acquisition announcement came alongside Future’s annual earnings up to 30 September, which reported a four-fold (309%) surge in pre-tax profit to £52m, on revenue of £339.6m (up 53% year on year).
Future, which owns magazine titles such as FourFourTwo and Woman’s Weekly, said revenue was driven by a combination of organic growth and acquisitions. Its online audience was up 56% over the year to 281.8m.
Zillah Byng-Thorne, the chief executive of Future, has been a board member of GoCo since September 2017. Future said she was not involved, directly or indirectly, in GoCo’s decision to sell.
Future was the best performing stock on the FTSE 350 last year. Commenting on the company’s financials, Byng-Thorne said hailed the company’s strategy, which is a combination of growing advertising spend and revenue from ecommerce.
"Our content now reaches one in three adults in the UK and US, and our leadership positions are underpinned by a track record of strong, consistent organic growth, and accelerated through acquisitions,” she said. “The long-term fundamentals of growing global digital advertising spend and ecommerce growth add to our confidence that, despite continued market uncertainty, we remain well-positioned to continue our strong growth."
GoCompare, a 14-year-old price comparison website for financial products such as car and home insurance and mortgages, demerged from Esure four years ago. It has been moving into subscription services over the last two years, having launched the auto-renew service AutoSave and acquired the startuup Look After My Bills last year.