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LendingTree (TREE) to Acquire ValuePenguin.com for $105M

Zacks Equity Research

Recently, LendingTree, Inc. TREE announced the acquisition of Value Holding Inc., the parent company of ValuePenguin.com, one of the personal finance online sites dealing in financial analysis of insurance to credit cards. Per the agreement, the total purchase consideration is $105 million to be paid in cash.

Notably, this November, in an effort to diversify its product portfolio and expand in the insurance industry, LendingTree acquired QuoteWizard.com, one of the largest online insurance comparison marketplaces. Therefore, the ValuePenguin acquisition will supplement the step taken toward insurance industry to provide customers with immense valuable information.

The acquisition, awaiting certain customary closing conditions, is likely to close in the first quarter of 2019. Notably, with cash on hand and existing credit agreement, LendingTree is expected to fund the deal.

With its in-depth research & analysis on financial topics, ValuePenguin serves clients with high-quality resources of information. As of Sep 30, 2018, the firm had $12.5 million in revenues and nearly $9 million in Adjusted EBITDA. The acquisition is expected to be accretive to LendingTree's adjusted earnings per share (EPS) in 2019.

"We are thrilled to add ValuePenguin's talented team and expertise to our portfolio," said Doug Lebda, founder and CEO of LendingTree. "Our recent QuoteWizard acquisition was our first step toward leadership in insurance customer acquisition. Adding ValuePenguin's high-quality content and SEO capability to QuoteWizard's proprietary technology and carrier network will set us apart and enable us to provide immense value to carriers and agents. Both businesses will benefit from LendingTree's strong brand and extensive marketing capabilities. We are in a great position to achieve further scale in the insurance space as well as the broader financial services industry," Lebda noted further.

Notably, LendingTree’s inorganic growth strategies remain impressive. While higher costs due to advertising are likely to hurt the company’s bottom line, its commitment to expand product offerings beyond mortgage-related products bodes well for the long term.

LendingTree’s shares have surged around 96.1% over the past two years compared with the industry’s growth of 2.5%.



The stock currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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