Fairfax Domain pays $50m for the ACT’s Allhomes

Fairfax Media’s Domain Property Group has agreed to pay $50 million for Allhomes, the leading real estate marketing website in Canberra.
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Allhomes serves more than 180 real estate agencies in the Australian Capital Territory and the brand will be retained, operating in tandem with Domain in the market.

”I think it does make sense for Domain, given there are big synergies in that sort of business because you just put it onto your website,” said Simon Marais, managing director of Allan Gray, which owns 5.7 per cent of Fairfax. ”I guess there is not a big cost in doing that but, of course, you should never pay too much for an acquisition.”

It is believed the $50 million price tag reflects a multiple of less than 10 times earnings before interest, tax, depreciation and amortisation.

Fairfax, which owns The Age and The Sydney Morning Herald, was advised by PwC, while Allhomes was advised by Origin Capital Group with legal advisers Connor Stevens and Meyer Vandenberg.

Allhomes, a private company majority owned by the Blackshaw real estate family, is thought to have spurned an offer from utility joint venture ActewAGL about three years ago.

Domain chief executive Antony Catalano said the Allhomes acquisition was very important for Domain.

”Allhomes has been a strong operator in the Canberra market for 14 years and is the go-to destination for all property buyers and sellers in the ACT,” he said.

Fairfax also owns a national radio network and metropolitan newspapers but, given the structural issues in print, Domain has quickly become the company’s trophy asset. The property business generated earnings before interest, tax, depreciation and amortisation growth of 33 per cent to $29.4 million for the six months ended December 31.

Mr Catalano has moved quickly since taking the helm of Domain last year, spending $80 million in acquisitions, rebranding the company and hiring 100 new staff.

One leading analyst said the Allhomes acquisition would initially add about $3 million to $4 million a year to Domain’s EBITDA.

”This is a sensible acquisition for the company,” the analyst said.

Fairfax shares closed 3.3 per cent higher at 94¢ on Thursday.

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