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This announcement is not an offer to sell, or a solicitation of an offer to subscribe for or to acquire, securities in the United States or in any other jurisdiction, including in or into the United States, Australia, Canada, Japan or South Africa. This announcement is an advertisement and not an admission document or a prospectus. It does not constitute or form part of, and should not be construed as, an offer to sell or issue, or a solicitation of any offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information in the admission document (the "Admission Document") which may be published in due course by OnTheMarket plc (the "Company") in connection with the proposed admission of the ordinary shares in the capital of the Company to trading on AIM, a market operated by London Stock Exchange plc.
This announcement constitutes a financial promotion for the purposes of section 21 of the Financial Services and Markets Act 2000 and has been approved by Zeus Capital Limited ("Zeus Capital"), which is authorised and regulated by the Financial Conduct Authority.
Agents' Mutual Announces Intention to Float OnTheMarket plc on AIM
4 August 2017 - Agents' Mutual Limited ("Agents' Mutual"), the agent-owned company which operates the OnTheMarket.com property portal, is pleased to announce its intention to list a new parent company, OnTheMarket plc (the "Company"), on the AIM market of the London Stock Exchange.
OnTheMarket plc will seek to offer a minority stake to investors as part of the IPO with OnTheMarket's entire issued and to be issued share capital being admitted to trading on AIM. The objective is to raise approximately £50 million of new equity capital which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider.
The Company has engaged Zeus Capital as Financial Adviser and Broker to manage a proposed Placing and IPO. The Board, following consultation with Zeus Capital, is seeking a valuation for the Company of between £200 million and £250 million.
Any successful IPO will be dependent on a number of factors, including a high level of support for the proposed share capital reorganisation and the new listing agreements, as well as market conditions.
Funding and facilitating further growth
It is intended that the funds raised, along with the existing fee revenue of the Company, will be used to support a heavy-weight national TV, digital and print media campaign. High profile local radio and out-of-home advertising is also planned. Funds will be committed to expanding OnTheMarket's sales and account management organisation and its technology development capacity. This will support the strategy to retain and attract more estate agents and other property advertisers to list on the portal and to grow the levels of traffic and engagement with the most motivated property-seekers.
The IPO will also facilitate the issuance of new shares as part of the Company's new agent recruitment strategy.
Reorganisation of OnTheMarket.com
Agents' Mutual's current members ("Members") number some 2,700 estate and lettings agency firms. In total, circa 5,700 agent branches list their properties with the OnTheMarket.com portal. Currently the Members have one membership interest per firm but, following the reorganisation into OnTheMarket plc, these firms will receive ordinary shares reflecting, amongst other factors, the aggregate amount of fees they have paid in order to list on the OnTheMarket.com portal since its launch in January 2015.
In order for the IPO to proceed, Members must first vote in favour of converting their existing membership interests in Agents' Mutual, a company limited by guarantee, into ordinary shares in a new company, OnTheMarket plc. This vote is expected to be held on 6 September 2017 at a Members Court Meeting. There will be a similar arrangement for Agents' Mutual Ltd Loan Notes to be exchanged for OnTheMarket plc Loan Notes which will be convertible into shares on IPO. Together, many Agents' Mutual Members provided funding totalling £11m for the venture by way of loan note subscriptions.
To support the plans, Members will need to commit to a new five-year Listing Agreement with the Company. The new agreements will supersede the existing agreements at the point of IPO.
With the increased funds supporting marketing and the expected step-change in growth following the IPO, the Company's new Listing Agreements will no longer include the "One Other Portal" (OOP) rule which is a term of all existing Listing Agreements. The rule was an essential element of the Company's entry into a property portals market dominated by two existing large players but has limited its appeal to some agents. The Board believes its release at IPO will enable OnTheMarket to attract substantially more agents to list with it.
Each Board Member firm, being Savills, Knight Frank, Strutt & Parker1, Chestertons, Douglas & Gordon, Glentree Estates, Kinleigh Folkard & Hayward and Spicerhaart Group, has undertaken to vote in favour of the Member Scheme, to vote in favour of their Loan Note Schemes and to enter into the Listing Agreement.
Ian Springett, Chief Executive of Agents' Mutual, said: "This is the beginning of a very exciting new chapter in our development. With the support of thousands of estate and lettings agents, we have rapidly established OnTheMarket.com as the third biggest player in the UK residential property portals market. For consumers and agents alike, we are committed to creating a genuine agent-controlled alternative challenger business and brand to the two leading incumbent portals. We believe that by raising capital from new investors we will substantially strengthen our market position. Agents provide the main property listings content and the main revenue sources for property portals. Our Members' ownership of shares in the newly listed company will enable them to remain enfranchised, aligned and fully invested in OnTheMarket's future success."
For further information, please contact:
Agents' Mutual Limited
Ian Springett, CEO
Temple Bar Advisory (Financial PR adviser)
0207 002 1510
Ed Orlebar or Tom Allison
07738 724 630 or 07789 998 020
Zeus Capital (Financial adviser/broker)
Martin Green, Giles Balleny, Pippa Underwood (Corporate Finance)
Ben Robertson, John Goold (Broking)
0203 829 5000
Background on Agents' Mutual
Agents' Mutual was formed as a company limited by guarantee in January 2013 by a small group of agent firms, with the objective of creating a new portal to challenge the dominance of Rightmove and Zoopla. Both groups were felt to be using their strong positions relative to their agent customers to impose significant price increases for their portal services.
The Agents' Mutual proposition of a portal controlled by agents which would offer a premier search service to consumers whilst charging fair prices to agents quickly found support among a very wide group of leading independent agents across the UK. These firms funded the venture by way of loan note subscriptions and committed to list with the portal once it went live.
After only two full years of operations, OnTheMarket.com is already the third biggest UK portal provider and has, with backing from its agent owners, developed unique sources of competitive advantage such as the 'New and Exclusive' property listings. The Board believes that the proposed changes and the planned IPO provide the opportunity for a transformational step-change in the portal's position and for development of new consumer and agent products and services, new segments of the property market and new strategic partnerships.
Ian Springett, Chief Executive
Ian founded Primelocation in 2000 and managed its sale to DMGT in 2005. He remained with the business until 2008 when he left to pursue other interests. He joined the Agents' Mutual venture at the start of 2013. Previously, Ian was Managing Director of Lombard Bank following a number of senior roles within NatWest Group.
Helen Whiteley, Commercial Director
Helen joined Agents' Mutual in August 2013, having previously been Sales & Marketing Director and part of the founding management team at Primelocation. Previously Helen was Marketing Director at Lombard Bank and previously worked at Citibank.
Clive Beattie, Chief Financial Officer
Clive came on board in March 2017 to help shape the forward strategy and prepare the Company for IPO. He was previously CEO & CFO of both Croft Associates and ThruVision. Clive is ACA qualified and spent over 12 years at UBS Investment Bank following three years at PricewaterhouseCoopers.
Zeus Capital Limited is authorised and regulated by the Financial Conduct Authority and its registered address is 82 King Street, Manchester M2 4WQ
1Strutt & Parker has confirmed its intention to support the Proposals but has, as yet, been unable to provide their undertaking due to their recently announced transaction involving Banque Nationale de Paris.
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