The deal values Grupo ZAP at approximately R$ 2.9 billion
The partnership promises an improved user experience and service offering
The transaction is subject to approval by Brazil’s Antitrust Agency (CADE)
Today, Schibsted's subsidiary Adevinta announced that OLX Brazil, the 50/50 joint venture between Adevinta ASA (OSE: ADE) and Prosus NV (AMS: PRX), and one of the fastest growing tech companies in Brazil, has entered into an agreement to acquire 100 percent of the shares of Grupo ZAP for a total cash amount of approximately R$ 2.9 billion. The investment will be equally financed by OLX Brazil’s two existing shareholders, with Adevinta financing its share through existing bank facilities.
OLX Brazil and Grupo ZAP, currently among the most relevant players in the online real estate classifieds and advertising sector in Brazil, are highly complementary platforms. The acquisition therefore will offer a great opportunity for synergies and value creation. The merger will help boost the real estate market, offering a better range of services with a broader database of properties. With Grupo ZAP, OLX Brazil will be able to offer its users more than 12 million listings from more than 40,000 real estate agencies and thousands of private listers, as well as allowing its advertisers to reach a larger audience. In 2018, Grupo ZAP had net revenues of R$ 217 million and EBITDA of R$ -18 million, with an average of 28 million visits per month in 2019.
“OLX Brazil and Grupo ZAP are at the forefront of helping players along the Real Estate value chain become more digital. The transaction will boost OLX Brazil’s capabilities to drive innovation and develop a superior customer experience, ultimately making buying, selling and renting real estate in Brazil much safer, simpler and more efficient for all players involved,” says Andries Oudshoorn, CEO of OLX Brazil.
Rolv Erik Ryssdal, CEO of Adevinta, comments:
“Expanding in territories where we see significant growth opportunities is a key pillar of Adevinta’s strategy. The large Brazilian real estate market has low penetration of online listings and is poised for a migration to digital. I am delighted to see OLX Brazil strengthening its position in the real estate vertical in order to capture part of the upcoming growth potential.”
Martin Scheepbouwer, CEO of OLX Group, the classifieds business of Prosus, says:
“We are excited to take our partnership in Brazil into a new stage of growth. The acquisition of Grupo ZAP promises to advance the real estate sector in Brazil, and develop technology that better serves all our customers. We already have a strong presence in the online real estate market in Europe, South Africa and other Latin American countries, and we look forward to exploring further growth opportunities in Brazil."
The transaction coincides with a period of high growth for online advertising. According to the IAB (Interactive Advertising Bureau) Brazil, in 2018 the industry represented an estimated investment of R$ 16.1 billion, with online classifieds forming just 10% of that. As the real estate industry is moving quickly from offline to online, boosted by low interest rates - online advertising is set to make significant gains. These gains look to be particularly substantial for online classifieds, as real estate classifieds platforms grow in popularity and traffic. In addition, with the real estate industry still to reach the maturity levels seen in other markets, there is plenty of opportunity for high-value growth overall.
The transaction is subject to approval by Brazil’s Antitrust Agency (CADE) and other customary closing conditions. Closing is expected in the second half of 2020.
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