The companies announced this morning that Zillow, the largest online real estate website, would acquire Trulia, the second-largest, for $3.5 billion in stock. As part of the deal, every Trulia shareholder will receive 0.444 shares of Zillow’s Class A Common Stock; in total, Trulia shareholders will own one third of the new combined company. The deal is expected to close next year.
Trulia CEO Pete Flint will retain his title and report to Zillow’s CEO, Spencer Rascoff. Flint and a second member of Trulia's Board of Directors will join the board of the combined company.
How Will Zillow (Z) Stock Be Affected By Its Acquisition of Trulia (TRLA)?
In June, Zillow reported 83 million unique users, while Trulia reported 54 million. The two sites have limited overlap; according to the press release, half of Trulia’s monthly visitors do not use Zillow and two-thirds of Zillow’s monthly visitors do not use Trulia.
"Consumers love using Zillow and Trulia to find vital information about homes and connect with the best local real estate professionals," Rascoff said in the press release. "Both companies have been enormously successful in creating compelling consumer brands and deep industry partnerships, but it's still early days in the world of real estate advertising on mobile and Web. This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry."