London, Dec. 14 (Reuters): GUS Plc said on Wednesday its Experian unit has bought US-based online shopping service PriceGrabber.com for $485 million (?273 million), beefing up the business services arm ahead of a planned demerger.
Privately-owned PriceGrabber, founded in 1999, allows shoppers on the Internet to compare prices of products from different online retailers. In November, there were 17 million visitors to the site.
The company, which hopes to expand rapidly in the UK, also powers comparison shopping on more than 300 other websites, including About.com, Ask Jeeves, Bell South, Comcast and MSN.
GUS, which spun off its fashion house Burberry on Tuesday, has been restructuring over the last few years and plans to separate its remaining two businesses Experian and its retailing operations, the Argos Retail Group.
No date has been set for the demerger but analysts think the split is likely to be next year.
Experian chief executive Don Robert said PriceGrabber was the third-biggest US firm in its field, earning higher margins than market leaders Shopzilla.com and Shopping.com.
“We think they’re the most consumer-friendly company out there and we’ve been courting them for quite some time,” he told a conference call.
PriceGrabber is forecasting sales of $60 million this year and profits of $25 million. GUS is paying eight times sales and 20 times earnings for the company but its sales growth is about 50 per cent.
Shares in GUS were up 2.5 per cent at ?10.08, valuing the group at over ?10 billion ($17.69 billion). They earlier hit a new high of ?10.09.
“Experian has a good history of making acquisitions work,” said Investec Securities, which has a ‘buy’ recommendation.
Analysts said the acquisition complemented Experian’s existing fast-growing interactive businesses well.
“We estimate that in its first full year the acquisition should enhance group earnings by around 1 per cent, rising to 2 per cent by year two,” said Panmure Gordon’s Justin Scarborough.
Panmure has an ?11 price target for GUS shares.
