Zoopla may acquire PropertyFinder for £1.5m as MBO fails

UK real estate startup Zoopla has confirmed that it is in advanced talks to purchase the PropertyFinder Group, which was put up for sale recently by joint owners REA Group and News International. My sources say the deal is all but done at a price of £1.5m. A potential management buyout appears to no longer be in the running.

It’s a far cry from 2005 when News Corp and Australian property group REA bought Propertyfinder for £14 million. It was later joined by UKPropertyShop and HotProperty.co.uk for £5.6 million. REA alone has now written off around AUS$61 million.

Zoopla commented on the record to TechCrunch Europe: “We can confirm that Zoopla.co.uk is currently looking at purchasing the PropertyFinder Group. We have a great deal of respect for the business and the brands that have been built within this group and will have further comments on our plans over the coming weeks.”

Zoopla has been playing a canny hand, using user-generated data to provide accurate house price estimates and building a lot of data-driven services. It took a Series B funding round at the beginning of this year from Atlas Venture and Octopus Ventures.

On June 26, REA Group and News International announced the “potential sale” of all or part of their jointly owned UK online business, which runs the Propertyfinder, Hotproperty and UK Propertyshop websites.

Propertyfinder‘s CEO – Gillian Kent, the former MSN UK head who joined in January ‘08 – had previously been leading an attempt at a management buy-out from joint owners News International and REA Group, but I understand that deal is no longer on the table. REA is retrenching back to Australia while News Corp is going through something of an anti-online rampage right now. News Int also has a stake in the free property listings site Globrix.

Propertyfinder is understood to have 2.3 million unique visitors and falls between FindAProperty and Primelocation according to comScore.