Purplebricks set to launch on stock market at £240m

This morning it was confirmed that Purplebricks is to launch on the AIM stock market.

It will have an expected capitalisation of £240.3m, with £58.1m conditionally raised.

The launch is due on December 17.

The debut will throw down an astonishing new marker for the residential property industry.

If the valuation, as speculated on EYE yesterday, turns out to be correct, then Purplebricks will be worth one third of the valuation of Countrywide and nearly half that of Foxtons.

Purplebricks, launched in only April of last year and backed to the tune of £7m by fund manager Neil Woodford, was founded by former Burchell Edwards owners, brothers Michael and Kenny Bruce.

The pair sold the midlands high street business to Connells three years after the brothers bought it out of administration.

The business, with 16 branches, sold in 2011 for an undisclosed sum.

The Bruces then concentrated their efforts on a complicated refurbishment business called JKM Property Solutions, that was chaired by ex-Countrywide boss Harry Hill, who described it as a “brilliant concept”.

When that business was wound down, the Bruce brothers announced their online agency venture.

At launch in April 2014, the Telegraph reported that Purplebricks would “shake up an industry in desperate need of change by providing a more affordable alternative to traditional bricks and mortar estate agents”.

Its backers include Woodford, Paul Pindar, former chief executive of Capita, and Errol, founder of Wonga.

The £240m valuation of Purplebricks, at only 18 months old, compares with Countrywide’s current valuation of £898m and Foxtons’ valuation as of yesterday at £500m.

Zoopla is valued at £1bn.

eMoov, according to its successful crowdfunding bid, says it is worth £20m.

Online agent Hatched, bought last month by Connells, is said to be worth £4m.

The purchase of Hatched raises a question as to whether Connells – having bought the Bruces’ previous high street business but now the owners of Hatched – are to become shareholders in the £230m business of Purplebricks that now wants to become the juggernaut in the online agency market.

However, all of these valuation sums pale into significance with Rightmove’s current valuation of nearly £4bn.

Originally posted here.

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