Moneysupermarket – The IPO

The History

Founded in 1999 by Cameron and Nixon and attracting 64m visitors last year. It is now set for a £1bn floatation with trading scheduled for the 31st July. With 4m registered users and a 49% market share, it explains the £105m turnover in 2006. Expansion is set to include acquisitions in Europe and further spending of £16m on UK advertising in 2008. Now the facts and the debate…

The Facts

• Entire share capital valued at just under £1bn
• This month’s planned share offering is between 170p and 210p
• The IPO raises £388m at the mid-point of that range
• 40% of shares will be sold
• In 2006, it generated and adjusted EBITDA of £33.0 million
• Moneysupermarket employs (as March 2007) 531 staff in Ewloe, North Wales
• Mr. Nixon, Chief Executive stands, to make £115m from the sale of 60.3m
• Mr. Cameron, Co Founder, will sell 22.5m shares at floatation representing his entire 5% stake
• £180m raised by the IPO will be used to pay back the loan used to persuade Cameron to leave
• More money will be used for mergers and acquisitions, possibly in France or Spain
• Credit Suisse has been appointed sole sponsor, global coordinator and bookrunner
• Lehman Brothers and UBS are co-lead managers

The Debate

• Moneysupermarket is facing strong competition in the insurance arena from confused.com (and their potential float now cancelled) as well as other small comparison sites hot on their heels
• Moneysupermarket denied that they were dropped from Google a few weeks ago
• Moneysupermarket have always used unethical link building techniques
• Direct Line have just launched an aggresive advertising campaign lambasting price comparison sites
• Many think the IPO is not without risks
• Moneysupermarket have always used a ‘per click’ business model, which enourages poor customer service
• Mr Cameron left the business five years ago after he fell out with Mr Nixon and has not had been involved with the company since

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