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Zillow Acquires Mortech

Zacks Equity Research

Recently, Zillow Inc. (Z) completed the acquisition of Mortech Inc. – a company that offers software tools required in the mortgage industry. The purchase consideration consists of $12 million in cash and 150,000 shares of restricted stock.

The acquisition, which was announced last month, enables Zillow to offer promotion and productivity tools to professionals in the mortgage industry. These tools will aid the mortgage professionals in business management and conversion of prospective borrowers into actual borrowers. Thus, the acquisition should augment the growth of Zillow's loan market – Zillow Mortgage Marketplace.

Zillow is constantly trying to expand its business through acquisitions. Apart from Mortech, the company has acquired four other companies over the last two years, and signed an agreement to acquire one more. The company has acquired these entities to widen its portfolio of marketing and business services for local professionals.

Last month, Zillow announced an agreement to acquire HotPads – a rental and real estate search site. San Francisco-based HotPads was launched in 2005 and has five mobile applications for smartphones, apart from a website. The acquisition is projected to close by the end of this month, subject to customary closing conditions.

Earlier in October this year, Zillow purchased internet and phone-based shopping platform – Buyfolio. Also in June, the company purchased RentJuice, which formed the basis for the creation of Zillow Rentals.

In 2011, Zillow acquired Diverse Solutions – a company that assists real estate agents in marketing and website development. In the same year, the company also acquired Postlets – an online platform for creating and distributing real estate lists.

Apart from growing inorganically, Zillow tries to innovate and offer new services to its customers in order to expand its business. For instance, the company launched a free market place and product suite for rental professionals in October this year. The product offering includes listing on the Zillow Rental Network, which is the largest web-based rental network.

Zillow currently carries a Zacks #3 Rank (Hold). Peer Market Leader Inc. (LEDR) also carries a Zacks #3 Rank.

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