Country Life publisher Future to buy GoCompare for £594m
The comparison website GoCompare has agreed to a £594m takeover offer from Future, Britain’s biggest magazines publisher.
The cash-and-shares deal to buy GoCompare, known for its adverts featuring the fictional opera singer Gio Compario, means another huge windfall for GoCompare’s non-executive chairman, Sir Peter Wood.
Wood, GoCompare’s largest shareholder, holds a 29.65% stake in the business, worth almost £170m under the terms of the deal. The cash element will involve a £41m payout to Wood, who will also become a top five shareholder in Future with a stake of around 5.5%.
Investors in GoCo Group, the parent company of GoCompare, will receive 33p in cash and 0.05 shares in Future, valuing each GoCo share at 136p.
GoCompare
The price comparison site was spun out of Esure in 2016 as the main brand of the parent company, GoCo Group
Other brands: The automatic switching services Look After My Bills and weflip; the discount offer business MyVoucherCodes
Investments: The Middle East price comparison site Souqalmal.com; the mortgage adviser startup MortgageGym
Revenues (2019): £152m
Pre-tax profits: £15.8m
Staff: 318
Future
Founded in 1985, it is the UK’s biggest magazine and digital publisher with 200 brands with 282 million monthly online users globally
Brands: Amateur Gardening, Total Guitar, Country Life, Marie Claire, FourFourTwo, Horse & Hound, Metal Hammer, Music Week, Official PlayStation magazine, Practical Caravan, Shooting Times, T3, Total Film, TV Times and Woman’s Weekly
Revenues (2020): £339m
Pre-tax profits: £52m
Staff: 1,500 in UK, 460 in US
The deal with Future will bolster Wood’s estimated net worth of £790m, which ranks him as the 179th wealthiest person in the UK, according to the Sunday Times Rich List.
Wood, 74, had already made two fortunes from insurance after founding Direct Line in 1985 and Esure, which owns the women’s car insurance brand Sheila’s Wheels, in 1999. GoCompare was spun out of Esure, which Wood still chairs, in 2016, the year he received a knighthood for services to UK industry and philanthropy.
The sale of Esure to the US private equity group Bain netted Wood a £360m payday. After paying £62m in capital gains tax on the deal, placing him among the UK’s top 10 taxpayers, Wood later criticised Amazon, Apple and Sir Richard Branson for using tax havens.
Earlier this year Wood, who gave £1m to the Conservatives ahead of last December’s general election, sold a residence in Palm Beach, Florida, for $37m (£28m).
The move marks a further drive into digital for Future, which owns titles including Country Life, Marie Claire and Metal Hammer and has a market value of £1.9bn. It already makes significant online income by referring readers of its independent reviews of products to retail partner websites to make purchases.
Zillah Byng-Thorne, Future’s chief executive and a former financial chief at Auto Trader, has sat on the board of GoCo Group since 2017.
“A few weeks ago Zillah came to me and said a deal makes a lot of sense given Future’s range of magazines,” said Wood. “The biggest problem with price comparison sites is that there is four of us slugging it out with the biggest expense being the cost of acquisition. Future captures one in every three eyeballs in the UK, the same in the US, with hundreds of magazines, they can really help us on the costs of that.”
Under the terms of the deal, shareholders in GoCo Group will own approximately 19% of the new combined company. The board of GoCo has unanimously recommended that shareholders vote in favour of the deal. Future has already received undertakings representing 33.5% of shareholders, including from Wood, committing to the deal.
Future says it has identified £10m in annual cost savings after completing the deal, which is expected in the first quarter next year.
Future has been one of few winners in the publishing industry during the coronavirus pandemic. A resurgence of interest in hobbies and crafts during lockdown, as well as entertainment such as live gigs being halted, has fuelled a boom for its stable of brands, which include Total Guitar, Practical Caravan and Real Homes.
The publisher registered an 18,000% surge in online traffic to Golf Monthly from people searching for articles explaining how to create a makeshift course in their back garden during lockdown.
The company published its results on Wednesday, reporting a 300% surge in pre-tax profits to £52m, and a 53% rise in revenues to £339m in the year to 30 September.
Future publishing has been on a buying spree in recent years, with the company seeking to build scale in the ailing magazine market while also moving towards a primarily digital model.
The company cemented its place as Britain’s biggest magazine publisher earlier this year after completing a £140m deal to buy TI Media, formerly Time Inc UK, which publishes 40 titles including NME, Horse & Hound, Woman & Home and Wallpaper.
