by Playfuls Staff |
17th March 2006
Looking to further expand its maket by taking advantage of the ever increasing use and profits brought by specialized Internet search and price comparison techniques, the E.W. Scripps Company acquired uSwitch, a leader in the UK when it comes to online price comparison and switching services. [more]
Founded in 2000, uSwitch.com is an online service that helps consumers compare rates on gas, electricity, home phone, digital television, broadband, credit cards, and secured and unsecured personal loans. The company has developed a series of calculators which evaluate several factors including price, type of service, location and payment method, all designed to help consumers find the best deal and enable them to conveniently switch their service provider online.
Scripps paid $366 million (210 million pounds) in net cash for 100 percent of the outstanding shares of privately held uSwitch Ltd. The acquisition is expected to be dilutive to earnings per share in 2006 and 2007 and accretive to earnings thereafter.
The acquisition of uSwitch adds a second, rapidly growing, freestanding interactive media business to the Scripps portfolio. In June of last year the company acquired Shopzilla, an online service that enables shoppers to quickly find, compare and buy millions of products sold by more than 65,000 merchants.
Both uSwitch and Shopzilla are the foundation of a newly created interactive media division for the company. Tim Peterman, senior vice president of interactive media for Scripps, will oversee the development of these rapidly growing and valuable Internet-based businesses.
The uSwitch service is free to consumers. The majority of uSwitch's revenue is derived from commissions paid by participating service providers. A commission is collected by uSwitch when a consumer's service is switched to a new provider. The company has contractual arrangements with the leading service providers in each home service category.
"The addition of uSwitch to our portfolio of interactive businesses, including Shopzilla, is intended to position Scripps to take full advantage of the rapid growth of online comparison shopping for both products and essential home services," said Kenneth W. Lowe, president and chief executive officer for Scripps. "An increasing number of consumers in the U.K. have found uSwitch to be a valuable online resource when shopping for energy, communications and personal finance services. We believe the uSwitch service and brand provide a sturdy platform on which we can expand into Europe and beyond."
The uSwitch senior management team, including CEO Andrew Salmon, will continue to guide the company after the acquisition by Scripps is completed.
"Comparison shopping for essential home services is already popular with consumers, but there is still ample room for growth," said Salmon. "With Scripps' broader vision for interactive media and support for our ambition to be the premium brand for choosing essential home services and personal finance products, we are now in an even stronger position to continue our growth in the U.K. and abroad."
