Moneyextra.com sold for £1

Fairpoint Group has agreed a deal to acquire price comparison site Moneyextra.com for £1.

Fairpoint said the deal speeds up its strategy of "extending the group from a debt solutions business for heavily indebted consumers into a broader based financial solutions business for financially stressed consumers".

Fairpoint said the final purchase price will depend on how much profit is generated by Moneyextra.

The initial consideration is £1 and up to £1m of working capital is being made available to Moneyextra to replace existing borrowings, fund integration activity and support revenue growth.

The company said the acquisition is expected to increase non-IVA revenues to approximately one third of group revenues on an annualised basis before revenue synergies from the final quarter of 2010 onwards.

"The transaction is structured to bring together Moneyextra’s product sourcing and comparison platform with the substantial lead generation of Fairpoint," it said in a statement.

"As part of the Fairpoint Group Moneyextra will avoid the need to fund all of its own lead generation and will benefit from the synergies of shared overheads."

Further earnout consideration is payable to the vendors contingent on a multiple of 49% of the future earnings of the Moneyextra business. On completion the directors expect the ultimate consideration to be approximately £8m.

Exceptional costs and reorganisation expenses are expected to cost £400,000.

Fairpoint chief executive Chris Moat said: “The income and expenditure review we undertake with customers gives us a clear insight into where customers can reduce their bills and the addition of Moneyextra to the group provides us with a clear way of delivering savings to customers on a range of product and services.”

Simon Taylor, chairman of Moneyextra, said: “This is an exciting deal for Moneyextra and our team. The natural synergies and shared market knowledge between the two companies will enable us to help more consumers improve their finances and for the group to compete on a profitable footing at a time when the price comparison market is commoditising.”