Leading German property portal IPO imminent - reports

Rumours in Frankfurt financial circles are intensifying that an IPO flotation of German market-leading web portal Scout24 is imminent. The group, which includes the property website ImmobilienScout24, is thought to be preparing an autumn listing which could bring in up to €1bn for its owners, and value the company at €3.5bn to €4bn, including debt of about €650m.

If accurate, this will be Scout24's second attempt to list itself as a public company, after it withdrew its proposed launch in autumn 2014 due to excessive volatility on the stock markets. At the time it was also thought that the new owners had not fully bedded down and the move was premature.

The new owners, private equity groups Hellman & Friedman and Blackstone, had paid €1.5bn to Deutsche Telekom for a 70% stake in the Scout24 business, with the German telecoms group retaining 30%. Scout24's turnover in 2013 was €340m, up 11% on the previous year, with EBITDA of €92m.

What was proposed then was to float 25% of the company for about €800m, before market uncertainty led to the IPO plans being shelved. Since then a trade sale has also been mooted, with suitors such as Axel Springer Verlag and ProSieben having shown interest this summer, before walking away.

Scout24 is the leading digital classifieds group in Germany, with portals such as AutoScout24, dating website FriendScout24, and FinanceScout24, in addition to its flagship property website ImmobilienScout24, which attracts more than 12m unique monthly visitors.

Since selling its stake to the new owners last year, Scout24 has undergone a major cost-cutting regime, selling off smaller assets and refinancing its debt on more favourable terms while paying a dividend to its owners. The group expects to post earnings before interest, taxes, depreciation and amortisation (EBITDA) of more than €200 million in 2016.

Allowing for a certain discount for IPO investors, the equity would likely be sold at a multiple of 18-19 times EBITDA. This would see Scout24 aligned with similar groups in the UK such as Rightmove and Autotrader, which trade at multiples of 21-22 times forward EBITDA.

Separately, the numbers two and three among the big property web portals, Immowelt and Immonet, who merged earlier this year to become one company under the name Immowelt Holding, have announced plans to collectively offer more properties for sale or rent on their website by next year than market leader ImmoScout24.

The two are developing a new product, called ProduktDuo, which will have a broader reach than that of their two web portals individually, according to Immowelt CEO Carsten Schlabritz. Booking space on the new platform will provide property brokers with a sizeable discount over booking individually on both portals, with higher response rates.  First tests confirm this much higher visibility, said Schlabritz.

The new holding company has Axel Springer Verlag as majority shareholder. Prior to the merger, Immowelt claimed 1.2m insertions per month with 4.2m visitors, while Immonet had 1.5m properties on offer and 6.1m visitors monthly.