Comparison website GoCompare.com (GOCO) is extending its internet reach after striking a deal to buy the MyVoucherCodes business. The company has struck at £36.5m agreement with Monitise, the former AIM-listed business owned by payments firm Fiserv since September.
MyVoucherCodes is one of the biggest online 'deals and offers' websites for UK users, receiving around 45m visits every year.
GoCompare sees the acquisition as a great way increase engagement with value-conscious, savvy internet users. The company also thinks this will be a neat way to converge usage across its entire family of websites and online brands, eyeing 100m overall site visits a year.
With concerns increasing about rising inflation rates across the UK, the acquisition makes strategic sense.
A PROFITABLE ADDITION
MyVoucherCodes is expected to post a £4m pre-tax profit this year to 31 December, on about £11.8m of revenue, on a pro forma basis.
The business will also add immediately to earnings, although that's before integration costs and goodwill amortisation of acquired assets.
Investec’s Steve Liechti believes the deal will boost GoCompare’s earnings per share (EPS) by 8% to 8p in the year to 31 December 2018.
That implies a 2018 price to earnings (PE) multiple of 12.7, based on the 101.25p share price, up about 2% today. That's versus a peer group PE of a little more than 15, according to Reuters' data.
