OnTheMarket (OTMP) said it has acquired the remaining 80% of property technology business, Glanty for an initial consideration of £1.5m.
The majority agent-owned firm, which operates the OnTheMarket.com property portal, acquired a 20% share in Glanty, which owns automated lettings industry portal, Teclet, in December 2019. At the time, OTMP also agreed to an option to acquire the remaining 80%.
At the time of the investment, Glanty’s primary product was “Teclet”, an automated portal for the lettings industry which manages the lettings process end-to-end, from the creation of a tenancy through to its management to renewal.
To date, revenue from the sales of “teclet” has increased as its customer base has continued to grow and further new products offering similar efficiency savings for the estate agency sector have been developed, the group noted.
This includes a range of API partnerships which are expected to accelerate OnTheMarket’s digital commerce strategies, offering agents the opportunity to earn income by directly presenting products and services that can be purchased at ‘the appropriate points.’
Glanty’s revenues grew by 76% in the year to 31 December 2020 to £0.876m (2019: £0.497m). The group made a loss after tax of £0.172m (2019: £0.802m) and had assets (excluding cash) of £2.7m at 31 December 2020. Net assets at that date were £0.785m.
OnTheMarket said that it expects Glanty may require 'some limited investment in the immediate short term', as the company seeks to further develop its products and services.
Upon completion of the call option, OnTheMarket said it will acquire the remaining shares for an initial consideration of around £1.5m plus a revenue and EBITDA based earnout arrangement. The group will also be required to repay shareholder loans of around £1.4m.
It said the earnout arrangement could result in maximum deferred consideration of up to £12m, which shall be payable if certain revenue and EBITDA targets are met by Glanty.
The company outlined that the earnout will be payable if third year revenues exceed £2m and third year EBITDA exceeds £0.5m. Below those levels, no earnout is paid.
If payable, the earnout payable will be 1 times third year revenues plus 1.5 times third year EBITDA, capped at an aggregate payment of £12m. OTMP said completion of the option is subject, inter alia, to the satisfaction of certain conditions and is scheduled for 28 May 2021.
“Since I joined the Group in December 2020, the team and I have built an ambitious roadmap of product and service innovations for the next 12 months. This is focused on a holistic approach to deliver rich engagement and functionality for users and provide them with more reasons to return to us regularly,” said Jason Tebb, CEO of OnTheMarket.
He added, “As part of our strategy, we’ll be integrating Glanty’s products into our offering, to create even better value for residential sales agents, lettings agents and housebuilders. By building tools that will assist them in gaining a competitive edge we will support increased efficiencies within their businesses, providing them with best-in-class software.”
Shareholders will recall OTMP’s previously outlined strategy which is to build and acquire technology solutions as a ‘next step’ in achieving its mission to deliver a market leading, agent backed alternative to Rightmove and Zoopla.
Last month, the group told investors that trading for the year to 31 January 2021 was ahead of previous forecasts following continued strong performance since the Christmas period.
The number of visits to the site during January totalled 28 million while it also stated that weekly site visits have exceeded 6 million every week since the start of February 2021.
Whilst it said it will continue to closely monitor the impact of COVID-19, it expects marketing expenditure to return to ‘more usual pre-COVID-19 levels’ in the year to 31 January 2022.
Shares in OnTheMarket have risen by over three-fold since the start of April 2020. CEO, Tebb, said the exercising of this option will provide the group with the building blocks to accelerate its development roadmap as well as roll-out new functionality. He added that this supports the group’s vision for further growth and innovation for the business.
Reasons to Follow OTMP
OnTheMarket, a majority agent-owned company which operates the OnTheMarket.com property portal, is a UK-based residential property portal provider. It aims to deliver an agent-backed portal to agents and new homes developers at ‘sustainably fair prices.’
Back in September 2020, OTMP unveiled to investors that it has signed a portal listing agreement with Taylor Wimpey, one of the largest British-based house building companies.
The agreement followed three months of record leads for OnTheMarket during which the portal had seen average visits of 26.8 million per month and an average of 2 million leads per month. Over 2 million leads were generated in August 2020, an 64% year on year rise.
“As part of our growth strategy we have continued to attract a wealth of developers and expanding this sector remains a key priority for the portal,” commented Helen Whiteley, Commercial Director of OnTheMarket, at the time of the announcement.
Since that period, shares in OTMP have risen by over 15% in value. It said it believes its combined revenue growth and financial discipline will continue to provide ‘increasing value’.
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