Purplebricks breaks into Canada with £29m acquisition

Online estate agent Purplebricks has agreed to buy Canadian real estate group DuProprio/ComFree (DPCF) for C$51m (£29.3m) in cash.

DPCF owns and operates one of Canada's leading commission-free real estate service networks as an online offering with similar aspects to Purplebricks. It has a 20.2% share of the real estate market in Quebec and has more recently launched into new territories, with a 2% share in Ontario and 2.3% in Western Canada.

Purplebricks said the business presents attractive opportunities to quickly grow market share in Canada, enhance customers' experience through its market leading model and technology and start capitalising on an extensive buy-side revenue opportunity there. In addition, it said the valuation is attractive based on DPCF's strong market position in the Canadian real estate sector, "impressive" revenue growth since launch and its underlying profitability.

In 2017, DPCF reported total revenues of C$45.6m and earnings before interest, taxes, depreciation and amortisation of C$4.2m.

Michael Bruce, global chief executive of Purplebricks, said: "DPCF developed a strong presence in delivering a flat fee, cost-effective, professional real estate service to the people of Canada, challenging the conventional agency market. Their model of bringing a range of service packages and support, with access to expertise from coaches to legal professionals, is proving highly attractive to the Canadian public, and has aspects in common with the Purplebricks' model and ethos in the UK, Australia and the US.

"We are excited about working with DPCF's exceptionally strong management team to leverage the significant opportunities for growth in the Canadian market. Expanding the geographical footprint across Canada and building the company's buy-side offering provides the potential to transform the size of the DPCF business and consolidate its market leadership. This acquisition follows the £125m strategic investment by Axel Springer in Purplebricks for the aim of accelerating global growth. Through applying the appropriate funding and support we believe we can deliver real value enhancement for our shareholders."

At 1125 BST, the shares were down 0.3% to 324.37p.