LendingTree acquires CompareCards

Source: LendingTree

LendingTree, Inc. (NASDAQ: TREE) announced today that it has acquired Iron Horse Holdings, LLC, which does business under the name CompareCards.

CompareCards is a leading online source for side-by-side credit card comparison, comprehensive credit education and credit health management. CompareCards provides consumers with one centralized location for pertinent credit card information needed to find the best card for their needs.

"CompareCards has an established reputation as a leader in the online credit card comparison industry with solid issuer relationships and un-matched expertise in credit card search engine marketing," said Doug Lebda, founder and CEO of LendingTree. "We continue to execute on our strategy, leveraging LendingTree's brand and industry-leading position to further diversify and expand in other financial service categories. We strongly believe that Compare Cards' technology platform, established issuer relationships and expert industry knowledge will accelerate our growth and further expand our presence in the online credit card comparison shopping industry."

"We are very pleased to join the LendingTree team and excited about our future together," said Chris Mettler, Founder and President of CompareCards. "We are confident that our core competencies, particularly as it relates to consumers with prime credit, will enhance LendingTree's ability to capture meaningful market share in the credit card vertical."

The equity purchase has a possible total consideration of $130 million, which consists of $85 million in cash at closing (to be adjusted for working capital and transaction expenses), and contingent consideration payments of up to $22.5 million in each of 2017 and 2018, subject to achieving specified growth targets.

Key Financial Metrics

For the nine months ended September 30, 2016, CompareCards delivered:

Revenue: $54.1 million
EBITDA: $11.3 million

"We are particularly excited about the accelerating profitability of CompareCards in 2016, driven by sustainable technology and breakthrough marketing performance," said Gabe Dalporto, Chief Financial Officer of LendingTree. "We've been extremely disciplined in our M&A methodology, focusing on identifying strategic and affordable acquisitions opportunities. This acquisition continues our diversification strategy, and giving effect to the acquisition as if it occurred at the beginning of the year, results in pro forma non-mortgage revenue of 51 percent of total for the nine months ended September 30, 2016. We believe that CompareCards' consistent, high-quality traffic, talented team and highly-regarded reputation will be complementary to our business, and we're confident that this transaction will be significantly and immediately accretive to LendingTree. We will provide updated 2017 guidance at our Investor Day on December 13th."

LendingTree will host a conference call to discuss the transaction and answer analysts' questions on November 17, 2016 at 8:30 AM Eastern Time (ET). Those interested in accessing the toll-free call may dial (877) 606-1416. Callers outside the United States and Canada may dial (707) 287-9313. A live audiocast will be available to the public and can be accessed via LendingTree's investor relations website at http://investors.lendingtree.com.

Vista Point Advisors, a San Francisco based boutique investment bank, acted as the exclusive financial advisor to CompareCards.

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