For those who are looking to sell or list their home online, the online real estate market changed substantially this week as Zillow acquired its rival company, Trulia. The deal has been in the works for some time, as Inquisitr reported back in July, but the final closure happened yesterday. The all-stock deal was originally valued at $3.5 billion, but closed at $2.5 billion, according to Inman. The delay in finalization happened due to FTC reviews.
Zillow finally pops post merger, rising over 15% in early trading to around $125 a share…Trulia holders get.444 of Zillow per share.
— Colin Robertson (@mortgagetruth) February 18, 2015
CEO Spencer Rascoff was asked by Fortune if the delays were stressful, and he said they certainly were.
“[T]hese processes always have some level of uncertainty associated with them which is very uncomfortable for a CEO. It has been a very stressful and difficult last several months, and much of the details around the integration only came together in the last several weeks as a result of the uncertainty.”
So now that the two companies have completed their merger, what changes for consumers?
Some 350 positions have been eliminated from Trulia.
This is often the case during mergers or acquisitions. According to Techcrunch, 280 of these jobs had already been eliminated, and another 70 will end during the second quarter. The layoffs are due to “redundancy in the combined company’s sales and administrative organizations.” The merged company still employs around 2000 people.
Trulia’s CEO and co-founder will remain active, although their positions are changing, according to Techcrunch.
“Trulia’s CEO Paul Levine will now be Trulia’s president and Peter Flint, Trulia’s co-founder and former CEO, is joining Zillow’s board of directors. The combined Zillow/Trulia will now operate under the name ‘Zillow Group’ and start trading on Nasdaq [on February 18th].”
Users won’t see a big difference in either site right away.
At this point, Zillow and Trulia will continue to operate separately, and as they have before. No one is particularly surprised by this, as its how Zillow has also operated its other acquisitions, Hotpads and StreetEasy. According to Zillow CEO, Spencer Rascoff, who was interviewed by Fortune
“Trulia will very much be its own brand but won’t be its own company. The Trulia website will remain but, over time, the listings inventory and the advertising sales will come under Zillow.”
Inman thinks this deal makes great financial sense.
In its breakdown of the deal for investors, website Inman says that the new combination of Zillow and Trulia will save as much as $100 million.
“The lion’s share of that will come from money not spent competing against each other and in cost savings from shared resources.”
Do you think that Zillow’s acquisition of Trulia will change the customer experience on their websites?
[Image from CNN Money]