Media giant Fairfax has acquired accommodation business Occupancy for $29.1 million, in yet another sign the company is ramping up its digital strategy following a string of purchases in the past five years.
The acquisition is also the first under the leadership of Greg Hywood, who says the move is an extension of its other digital transaction businesses in the accommodation space – it has previously purchased Stayz.com.au, Holidayhomes.co.nz and Bookit.co.nz.
But it also represents an extension of its general push into online over the past few years. It made a major purchase of FindABabySitter.com.au for a reported $3 million back in December 2009, and took over New Zealand website TenderLink late last year.
The Occupancy purchase will be broken up into two parts – Fairfax will pay $17.9 million in cash and $11.2 million in shares, with Occupancy and its two sites, Rentahome.com.au and Takeabreak.com.au, to be tied into the Stayz business.
Existing shareholders will own 10% of the new entity, with Fairfax holding the remainder of the business.
Fairfax says that given Occupancy’s estimated EBITDA for 2011, the purchase represents an earnings multiple of 9.1. This would put Occupancy’s estimated EBITDA at just over $3.1 million.
Both Fairfax and Occupancy were contacted for comment by SmartCompany this morning, but neither were available prior to publication.
The vast majority of Occupancy’s revenues come from accommodation booking fees, which make up 80% of its sales.
“Occupancy is an online transactional business that is growing strongly and has huge market potential,” Hywood said in a statement. “This potential will only be enhanced when coupled with Fairfax Media’s market-leading presence in online travel and excellent digital audiences.”
“Occupancy also provides a perfect fit with our stated strategy of expanding in the online transactions sector, where we are committed to further strengthening our position.”
Occupancy’s joint chief executives Justin Butterworth and Craig Davis both said in a statement the purchase is a win for “accommodation owners, managers and travellers”.
Stayz has over one million unique visitors a month and has about 27,000 property listings ever year. The two sites under the Occupancy brand are expected to add 25,000 listings and 840,000 unique visitors.
Fairfax claims 10% of all holiday rentals are booked through its Stayz website.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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