SEATTLE, July 28 (UPI) -- Online real estate listings site Zillow agreed on Monday to acquire rival Trulia for $3.5 billion, marking a major consolidation in the online real estate segment.
Zillow will purchase Trulia in an all-stock deal, creating the largest online collection of real estate listings. The deal values Trulia's stock at $2.6 billion and will give Zillow access to the former's convertible notes as well. Zillow's shareholders will own 67 percent of the combined company while Trulia shareholders will retain the balance.
The deal is expected to be closed next year and will have Trulia Chief Executive Pete Flint continuing in that role but reporting to Zillow CEO Spencer Rascoff. The combined company will retain both the Trulia and Zillow brands.
"The companies know each other very well," Rascoff told th eNew York Times. "We've been competitors and rivals for nine years, but I've always had respect for them."
The combined company will account for 61 percent of total traffic in the segment, according to comScore. Zillow reported 83 million users across its mobile and web platforms, while Trulia reported 54 million users.
Zillow has become an industry leader with its "Zestimates," which help users determine how valuable their property is, whereas Trulia has focused on providing tools to help potential home sellers. According to Rascoff, this means there was little overlap in the two businesses, with only about half of Trulia's users visiting Zillow.
The two companies took only six weeks to hash out the deal, with Rascoff approaching Trulia in June. While Trulia initially dismissed the offer, they did ask Zillow for further details and ultimately agreed to negotiate an all-stock deal that would benefit both sets of shareholders.
Zillow and Trulia will continue to compete with each other until the deal is closed sometime next year.