European publishing company Axel Springer SE agreed to acquire an 11.5% stake in U.K.-based real estate agency Purplebricks Group PLC for roughly £125 million.
Axel Springer conditionally agreed to subscribe for 27,777,777 new Purplebricks ordinary shares at 360 pence apiece. The company also agreed to purchase 6,944,444 ordinary Purplebricks shares from Purplebricks CEO Michael Bruce, nonexecutive director William Whitehorn and Global Sales Director Kenny Bruce.
Purplebricks expects to receive roughly £100 million in net proceeds from the share subscription, of which it plans to use about £50 million for its proposed accelerated rollout in the U.S., with the rest to go toward funding technological innovation and expansion of the company's service offering and to support its entry into new markets.
The strategic investment is contingent on the passing of certain resolutions to effect the share subscription at Purplebricks' general meeting, to be held on or around April 18. Axel Springer executive board member and Classifieds Media President Andreas Wiele will join the Purplebricks board as a nonexecutive director.
Purplebricks also named several other members to its board, set to join on or before April 25, including Just Eat PLC Global COO Adrian Blair, who will join Purplebricks as an independent nonexecutive director and will chair the nomination committee. Civica Group Ltd. founder and Executive Chairman Simon Downing will also serve as Purplebricks independent nonexecutive director and will chair the remuneration committee. Downing is also chairman of Edenhouse Solutions Ltd. and a nonexecutive director at AdvisorPlus Business Solutions and Datum Datacentres.
Purplebricks also appointed former Just Eat Group CFO Mike Wroe as senior independent nonexecutive director and chair of audit committee, while nonexecutive directors Nick Discombe and Will Whitehorn will retire from the board on or before June 30.
Citing "subdued" market conditions in the U.K., Purplebricks said it expects group revenues for the year ending April 30 to be approximately 5% behind its compiled consensus of £98 million.