Trulia Gains on Market Leader Acquisition

NEW YORK ( TheDeal) --San Francisco online real estate information services provider Trulia Inc. said Wednesday, May 8, that it agreed to acquire rival Market Leader Inc. for about $355 million in stock and cash.

Financial terms of the deal, valued at $11.33 per share, call for Market Leader shareholders to receive a combination of $6 per share in cash and 0.1553 Trulia shares for each Market Leader share they own.

The purchase price represents an 18% premium over Market Leader's Tuesday close of $9.61 per share. Trulia will fund the cash portion of the acquisition through cash from its balance sheet.

Trulia shares fell 8%, to $31.54, on Wednesday afternoon, giving it a market capitalization of $872 million. Market Leader was trading 1% higher, to $10.79, with its market cap near $292 million.GCA Savvian Advisors LLC and Perkins Coie LLP's Eric DeJong advised Market Leader.

The companies seek to create a one-stop shop website for real estate brokers and homebuyers, providing information on listings, neighborhood demographics and agents that will be complemented by Market Leader's software.

"Our acquisition of Market Leader will create unprecedented value for our customer base while also accelerating our growth," Trulia CEO Peter Flint said in a statement.

In March, Trulia raised about $150 million in a secondary offering. It said it would use the proceeds to seek acquisitions.

Seattle-based Market Leader, which has close to 285 employees, generated revenue of $45 million in 2012. The target has more than 23,000 subscribers and close to 135,000 software licensees. The new combined company will have more than 46,000 subscribers.

"Market Leader and Trulia have highly complementary offerings and cultures and we believe this combination will be a big win for our customers, our employees and our shareholders," Market Leader CEO Ian Morris added in a statement. Morris and the rest of his management team are expected to stay on with the combined company.

The two companies expect to complete the transaction by the end of the third quarter, pending regulatory and shareholder approval. The deal agreement comes with a $15 million termination fee payable to Trulia.

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