Online agent easyProperty is buying The Guild of Property Professionals plus Fine & Country in a deal – described as ‘game changing’ – said to be worth £33m.
The deal, likely to cause shock-waves, is officially being described as a merger, or ‘reverse takeover’, rather than a purchase.
The deal is however backed by Toscafund Asset Management, which has already pumped money into easyProperty, which in March posted losses of almost £11m on a turnover of under £1m for the year to the end of last September.
Toscafund poured £14m into easyProperty at the end of 2015, and has now decided on further investment.
The business model of easyProperty is changing, and new management has been brought in from GPEA, parent company of both the Guild and Fine & Country. The easyProperty brand will remain the same, although we understand that the deal means that the franchise agreement originally struck between Robert Ellice and ‘easy’ has had to be renegotiated.
The new model means that easyProperty will evolve from being solely a business to consumer operator, to a provider of services to licensees.
The deal will allow the 5,000 Guild agents plus those in the Fine & Country network across the UK to offer additional fixed-price online sales and lettings packages alongside their traditional commission model.
It means that Fine & Country agent branches will, for example, be able to offer both their own luxury high street brand as well as acquire licences at £500 per month each, to access easyProperty’s fixed-price packages aimed at the volume residential market.
The deal is expected to complete at the end of this month.
The Guild was established 24 years ago. Its highly successful spin-off, Fine & Country, has taken off internationally since its launch in 2002, and now has almost 300 outlets in the UK and elsewhere.
easyProperty was founded by Robert Ellice, and operates using the name under licence from Sir Stelios Haji-Ioannou’s easyGroup. Ellice will now become commercial director.
The newly merged company, known as e-Prop Services plc – very similar to the existing company name registered at Companies House – will be headed by Jon Cooke, who has been appointed CEO.
He describes the merger as a game changer for the estate agency industry: “This deal allows our independent agents to offer more consumer choice with sales and lettings products catering to both the do-it-yourself and the do-it-for-me vendor and landlord preferences.
“We recognise the market requires and demands both online products and traditional methods. What I’d like to stress is this newly merged business is the convergence of traditional estate agency and online.
“Effectively we are providing independent agents the ability to compete with products targeting each consumer demographic.
“At the same time, licensees will have full autonomy and flexibility to not only benefit from upfront revenue streams but take advantage of potential lead-generation into their core brand.
“In the coming months we will be launching the new easyProperty website as well as a new national brand marketing campaign.”
Cooke, who headed up LSLi, the acquisition wing of LSL and was later estate agency director at the group, will retain his executive director positions with the Guild and Fine & Country.
His new role as e-Prop Services Plc CEO carries with it the responsibility of rolling out the new easyProperty platform across the industry.
Malcolm Lindley, Guild founder and Fine & Country co-founder, is appointed chairman of e-Prop Services.
He said: “Certainly the landscape of our industry is changing. Our clients require more choice, more flexibility, different ways of accessing our services, transparency and value.
“The strength of the ‘easy’ brand will provide the platform for us to defensively and aggressively continue to protect our independent agents’ market share.”
During the Guild’s recent Fit For The Future roadshows, more than 80% of attendees expressed an interest in a branded technology platform allowing them to offer a choice of services to their customers.
The Guild says it will be following up with another round of regional meetings in the coming weeks to present the new platform and customer proposition, and the commercial opportunities.
Yesterday evening, Cooke insisted that the deal was a merger, or ‘reverse takeover’, rather than an acquisition of the Fine & Country and Guild businesses.
He said that take-up of the easyProperty licences could be popular where agents in some areas are under pressure from online firms.
Cooke said he expects market share by online agents offering ‘self-service’ to grow to between 23% and 25% of the market.
Asked if the easyProperty brand could topple Purplebricks, he said that he expects there to be two brands in the market – similar to Coca Cola and Pepsi, and to Rightmove and Zoopla.
Cooke also acknowledged that while the industry might see the easyProperty brand as damaged (because of their latest accounts), consumers do not. He did criticise some earlier PR – including the enormously expensive launch party among the ‘dinosaurs’ at a London museum, and the ‘funeral march’ of high street agents in London.
Cooke said: “The reality is that the easy brand has 98% public recognition.”
Cooke would not go into details as to how founders of the Guild and Fine & Country may have benefited from the deal.