Australian online property marketplace iBuyNew.com.au has been acquired by technology investment company Disruptive Investment Group (DVI) for $5.9 million.
DVI already owns a 50 per cent stake in iBuyNew operator Find Solutions Australia and had the option to purchase the remaining 50 per cent in 2019.
However the DVI board this week announced it would increase its stake in Find Solutions Australia to 100 per cent ahead of time.
The company has entered a binding term sheet to purchase the remaining stake in the iBuyNew platform, which connects prospective buyers in Australia with more than 2,700 new and Off The Plan (OTP) properties.
The deal is expected to be completed by July 1 this year subject to approval from shareholders.
DVI has proposed a final payment of $5.9 million for the remaining Find Solutions stake comprising 75 per cent DVI stock plus a cash portion of $1.5 million to be paid in three tranches.
DVI will issue 245.75 million shares at 1.8c per share which will be subject to escrow restrictions for 24 months post completion.
In addition iBuyNew has at least $2 million in deferred cash income comprising expected commissions to be paid on settlement of various contracted property purchases.
Based on the proposed terms, incorporating 11xFY15 operating EBITA and 4xFY15 Revenue, iBuyNew's enterprise value is understood to be $11.8 million.
iBuyNew Founder and CEO Mark Mendel will continue to lead the business and has agreed to accept nearly 75 per cent of the purchase price ($4.4m) in DVI scrip.
He will also join the DVI board as an executive director subject to shareholder approval.
“We are very pleased to have entered into this binding Term Sheet," says DVI non-executive director and chairman Dr Adir Shiffman.
"iBuyNew is a technology business disrupting a huge industry in a remarkable way, and Mark Mendel has proven to be a strong and capable operator. Revenue is increasing rapidly, the business is delivering earnings, and we have a huge market to conquer."
Andrew Jensen, currently a non-executive director of DVI, will become an executive director of DVI.