Exclusive: Go Compare Clicks On £450m Sale
Its advertisements are routinely voted among the most irritating on TV, but Go Compare, the price comparison website, is poised to defy its critics with a sale that will catapult its founder in the ranks of Britain's super-rich.
I have learnt that the board of Go Compare, which was founded just seven years ago, has appointed Evercore Partners, an investment banking advisory firm, to oversee a review of the internet aggregator's ownership.
Insiders believe the review will lead to an auction of the company that is likely to value Go Compare at well over £450m.
The price comparison site recorded revenues of £109m and profits of £34.7m in 2011, and recent takeovers in the sector - such as Google's acquisition of BeatThatQuote in 2011 - have valued target companies at roughly four times annual revenues.
Such a deal would crystallise a massive fortune for Hayley Parsons, Go Compare's founder, who established the site in 2006 aged just 32 and who now owns a 23% stake.
Ms Parsons is one of the UK's most successful internet entrepreneurs, having also worked on the development of Confused.com, another price comparison site, while she was employed by Admiral, the insurance company. She left school at 16 with five GCSEs before moving into insurance broking.
Evercore is understood to have been appointed by Go Compare's board only in recent weeks, and a decision about a sale is unlikely for several months, according to insiders.
Potential buyers could include technology companies such as Google or a rival like Comparethemarket or Moneysupermarket.com. Private equity firms are also expected to table offers.
Best-known for its adverts featuring the fictitious opera singer Gio Compario, Go Compare recruited esure, the motor insurer, as a shareholder in 2007 to provide it with the funds for spending on marketing activity that was required to achieve widespread brand recognition.
Newport-based Go Compare argues that it was able to stand out in a crowded market as the first such service to offer detailed product information. The site offers data about scores of different product categories ranging from life insurance to phone and energy tariffs.
Reports last year suggested that Grant Thornton had been appointed to conduct a review of Go Compare, but insiders confirmed today that the accountancy firm had been working to assess a valuation for Ms Parsons' stake alone.
A sale of Go Compare is unlikely to be complicated by its split share ownership. Esure, which is expected to announce its intention to float on the London Stock Exchange next week, owns 50% of the company, which it may carve out as it prepares its listing. The balance of Go Compare's shares is held by Ms Parsons and other employees.
People close to the situation dismissed suggestions that esure was interested in buying the other half of Go Compare's shares that it does not already own.
An esure spokesman said today: "Esure owns 50% of Gocompare.com. We are happy with that investment and have no plans to further increase our shareholding."
Go Compare declined to comment.