CHARLOTTE, N.C., Nov. 16, 2016 /PRNewswire/ -- LendingTree,
Inc. (NASDAQ: TREE) announced today that it has acquired Iron
Horse Holdings, LLC, which does business under the name
CompareCards. CompareCards is a leading online source for
side-by-side credit card comparison, comprehensive credit education
and credit health management. CompareCards provides consumers with
one centralized location for pertinent credit card information
needed to find the best card for their needs.
"CompareCards has an established reputation as a leader in the
online credit card comparison industry with solid issuer
relationships and un-matched expertise in credit card search engine
marketing," said Doug Lebda, founder
and CEO of LendingTree. "We continue to execute on our strategy,
leveraging LendingTree's brand and industry-leading position to
further diversify and expand in other financial service categories.
We strongly believe that Compare Cards' technology platform,
established issuer relationships and expert industry knowledge will
accelerate our growth and further expand our presence in the online
credit card comparison shopping industry."
"We are very pleased to join the LendingTree team and excited
about our future together," said Chris Mettler, Founder and
President of CompareCards. "We are confident that our core
competencies, particularly as it relates to consumers with prime
credit, will enhance LendingTree's ability to capture meaningful
market share in the credit card vertical."
The equity purchase has a possible total consideration of
$130 million, which consists of
$85 million in cash at closing (to be
adjusted for working capital and transaction expenses), and
contingent consideration payments of up to $22.5 million in each of 2017 and 2018, subject
to achieving specified growth targets.
Key Financial Metrics
For the nine months ended September 30,
2016, CompareCards delivered:
- Revenue: $54.1 million
- EBITDA: $11.3 million
"We are particularly excited about the accelerating
profitability of CompareCards in 2016, driven by sustainable
technology and breakthrough marketing performance," said
Gabe Dalporto, Chief Financial
Officer of LendingTree. "We've been extremely disciplined in our
M&A methodology, focusing on identifying strategic and
affordable acquisitions opportunities. This acquisition continues
our diversification strategy, and giving effect to the acquisition
as if it occurred at the beginning of the year, results in pro
forma non-mortgage revenue of 51 percent of total for the nine
months ended September 30, 2016. We
believe that CompareCards' consistent, high-quality traffic,
talented team and highly-regarded reputation will be complementary
to our business, and we're confident that this transaction will be
significantly and immediately accretive to LendingTree. We will
provide updated 2017 guidance at our Investor Day on December 13th."
LendingTree will host a conference call to discuss the
transaction and answer analysts' questions on November 17, 2016 at 8:30
AM Eastern Time (ET). Those interested in accessing the
toll-free call may dial (877) 606-1416. Callers outside
the United States and Canada may dial (707) 287-9313. A live
audiocast will be available to the public and can be accessed via
LendingTree's investor relations website at
http://investors.lendingtree.com.
Vista Point Advisors, a San Francisco based boutique
investment bank, acted as the exclusive financial advisor to
CompareCards.
About CompareCards:
CompareCards' mission is to help people make smarter, more
informed, healthier financial decisions based on deeper knowledge
of financial offers. Each month, over 1.5 million visitors come to
CompareCards' website to independently compare credit cards
side-by-side and choose a credit card based on interest rate,
reward benefit, cost savings, and other factors that are important
to each consumer. CompareCards provides easy-to-use, objective
tools and educational resources that help consumers do everything
from making credit card comparisons and managing their credit
health to helping children in primary, middle, and high school
learn how to make wise financial decisions. For more information,
please visit www.comparecards.com.
Iron Horse Holdings, LLC is based in Charleston, South Carolina and also has an
office in the greater Chicago
area.
About LendingTree, Inc.
LendingTree, Inc. (NASDAQ: TREE) operates the nation's
leading online loan marketplace and provides consumers with an
array of online tools and information to help them find the best
loans for their needs. LendingTree's online
marketplace connects consumers with multiple lenders that compete
for their business, empowering consumers as they comparison-shop
across a full suite of loans and credit-based offerings.
Since its inception, LendingTree has facilitated more
than 55 million loan requests. LendingTree provides
access to its network of over 400 lenders offering home loans, home
equity loans/lines of credit, reverse mortgages, personal loans,
auto loans, small business loans, credit cards, student loans and
more.
LendingTree, Inc. is headquartered in Charlotte,
NC and maintains operations solely in the United States. For more information, please
visit www.lendingtree.com.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
The matters contained in the discussion above may be considered
to be "forward-looking statements" within the meaning of the
Securities Act of 1933, as amended, and the Securities Exchange Act
of 1934, as amended by the Private Securities Litigation Reform Act
of 1995, as amended. Those statements include statements regarding
the intent, belief or current expectations or anticipations of the
Company and members of its management team regarding the expected
benefits to the Company of the acquisition of CompareCards,
including expected growth in the Company's credit cards business,
earnings accretion and potential synergies. Factors currently known
to management that could cause actual results to differ materially
from those in forward-looking statements include the following: the
retention of key employees of CompareCards and the ability of the
Company to successfully integrate CompareCards to achieve expected
benefits; accounting rules related to contingent consideration that
could materially affect earnings in future periods; adverse
conditions in the economy affecting credit card issuers and their
willingness to issue new credit; the willingness or interest of
credit card issuers and other advertisers in the business
verticals in which we or CompareCards operate to advertise on our
or CompareCard's websites or mobile applications; changes in
application approval rates by credit card issuer customers;
increased competition and its effect on our or CompareCards's
website traffic, click-through rates, advertising rates,
margins, and market share ability to provide competitive service to
credit card issuers and to consumers using CompareCards' and the
Company's online offerings and other platforms; ability to maintain
brand recognition for both the Company and CompareCards and to
effectively leverage the LendingTree brand with the CompareCards
brand; ability to develop new products and services and enhance
existing ones; competition; risks associated with the Company's
ongoing litigation with NextAdvisor including the effect of the
preliminary injunction obtained by NextAdvisor on a portion of the
acquired CompareCards business; the potential effects of existing
and new laws, rules or regulations; failure to maintain the
integrity of systems and infrastructure through integration;
assumed liabilities associated with CompareCards' historical
operations, including as a result of privacy regulations or data
breaches; and failure to adequately protect intellectual property
rights or allegations of infringement of intellectual property
rights. These and additional factors to be considered are set
forth under "Risk Factors" in the Company's Annual Report on Form
10-K for the period ended December 31,
2015, in its quarterly report on Form 10-Q for the period
ended September 30, 2016 and in its
other filings with the Securities and Exchange Commission. The
Company undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results or expectations.
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SOURCE LendingTree, Inc.