Zillow Announces Trulia Acquisition

Following speculation of a deal in the making last week, two of the biggest names in online real estate announced they are joining forces.

Zillow, Inc., announced Monday it has entered into a definitive agreement to acquire longtime rival Trulia, Inc., for $3.5 billion in stock.

As part of the agreement, Trulia shareholders will receive 0.444 shares of Class A Common Stock of Zillow for each share of Trulia, giving them approximately 33 percent of the combined company at closing, which is expected to happen in 2015. The deal's value represents a premium of 25 percent to Trulia's closing price as of July 25.

The combined company will maintain both the Zillow and Trulia brands, according to a joint release. Trulia CEO Pete Flint will remain in his current role, reporting to Zillow CEO Spencer Rascoff. Flint will also join the board of directors of the combined company along with an unnamed second member of Trulia's current board.

By coming together, the two companies say they hope to expand their distribution, enhance value and return on investment for advertisers, and cut costs while continuing to innovate in the field of online listings.

"Consumers love using Zillow and Trulia to find vital information about homes and connect with the best local real estate professionals," Rascoff said.

"Both companies have been enormously successful in creating compelling consumer brands and deep industry partnerships, but it's still early days in the world of real estate advertising on mobile and Web. This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry," he continued.

While neither company expects opposition from antitrust regulators, the combined entity will undoubtedly be a major force in the market. In June alone, Zillow reported a record 83 million unique users across both mobile and Web, while Trulia reported a record 54 million unique users with limited overlap.

By maintaining two distinct brands, the combined company will continue to offer different products and user experiences, attracting more users and maximizing distribution.

"By working together, we will be able to create even more value for home buyers, sellers, and renters, as well as create a robust marketing platform that will help our industry partners connect with potential clients and grow their businesses even more efficiently," Flint said. "Our two companies share complementary employee cultures with innovative, consumer-first philosophies and a deep commitment to create the best products and services for our industry partners."