Experian today announced that it has acquired PriceGrabber.com, a leading provider of online comparison shopping services in the US.
PriceGrabber.com operates in fast-growing markets and complements Experian's existing operations connecting consumers to companies over the Internet. The purchase price is $485m plus expenses and was funded from existing bank facilities of GUS plc.
Don Robert, Chief Executive Officer of Experian, commented: "As a trusted and preferred comparison shopping destination, PriceGrabber.com has a leading position in a fast-growing market. When combined with the complementary skills, expertise and scale of Experian, in both Interactive and Marketing, we are very excited about the future growth prospects for PriceGrabber.com."
Founded in 1999, PriceGrabber.com is a leading provider of online comparison shopping services in the US. It is based in California, employs 140 people and has been privately held. Its website enables consumers instantly to obtain free and unbiased information before making a purchase decision. Its database contains millions of products in over 20 categories such as consumer electronics, photography, computers, home and garden and apparel. Consumers can then find the retailer or seller which provides the most attractive offer. PriceGrabber.com connects its online shoppers to over 9,000 merchants of all sizes, from large traditional retailers to smaller local sellers. These merchants pay PriceGrabber.com for each lead (or each consumer directed) to the retailer's own website. PriceGrabber.com also powers comparison shopping on over 300 websites, including About.com, Ask Jeeves, Bell South, Comcast and MSN.
For the 12 months to December 2005, PriceGrabber.com estimates that sales will be $60m and EBIT $25m, representing an increase of about 50% over the previous year.
The acquisition of PriceGrabber.com further strengthens Experian's position in connecting consumers to companies over the Internet. In the six months to 30 September 2005, Experian Interactive contributed about one-third of sales in Experian North America and grew by nearly 40 per cent, excluding acquisitions. Experian believes that it can enhance the competitive position of PriceGrabber.com by sharing scale and expertise in Internet marketing, by using Experian's data and analytics to improve the services offered to consumers and by providing its retail clients with another channel to sell to consumers.
PriceGrabber.com operates in high growth markets. The comparison shopping services market in the US was worth about $400m in 2004, with market projections for growth of around 40 per cent per annum over the next five years. This growth reflects increasing use of the Internet by consumers to research and acquire goods and services, driven in part by greater broadband penetration. The use of comparison shopping services by online shoppers is also growing as consumers benefit from the value these sites deliver. To reach these shoppers, companies are advertising more online, especially as the return on investment from online advertising is often superior to that from traditional channels.
PriceGrabber.com has strong organic growth opportunities. As well as benefiting from the natural growth in its established markets, PriceGrabber.com is expanding its presence in new vertical markets such as auto, travel and wireless. It also has significant international development opportunities as illustrated by its nascent operations in the UK and Canada.
PriceGrabber.com complements Experian's Marketing Solutions. Retail and catalogue shopping is the second largest vertical market for Experian globally. Excluding Experian Interactive, it accounts for about 17% of Experian North America sales. The acquisition of PriceGrabber.com will strengthen Experian’s presence in this important sector by giving its retail and catalogue clients another channel to market, complementing the current multi-channel offer (direct mail, email via CheetahMail and online lead generation via MetaReward).
There are further synergies available from combining Experian and PriceGrabber.com, especially as the latter can benefit from Experian's substantial Internet marketing expertise and scale. These include the ability to generate more traffic at low cost by encouraging consumers to visit other Experian Interactive websites (Consumer Direct, LowerMyBills.com, MetaReward, ClassesUSA.com and Affiliate Fuel). PriceGrabber.com also expects to be able to improve the quality of leads referred to retailers' websites by adding Experian data and analytics where appropriate.