Bankrate has agreed to acquire MMIS/Interest.com and FastFind.com in separate deals worth $40 million, the company said today in separate announcements.
MMIS publishes mortgage guides in more than 300 newspapers and operates Interest.com, a Web site that publishes financial rates and information connecting consumers with lenders. The purchase price for MMIS is $30 million in cash.
“By acquiring MMIS/Interest.com we will be increasing our graphic advertising inventory, broadening our cost-per-click platform, increasing our lead aggregation potential and tripling our newspaper footprint,” said Thomas R. Evans, President and CEO of Bankrate.
MMIS sells advertising and publishes consumer mortgage tables and guides in some of the top newspapers in the country, including: The Chicago Tribune, The Chicago Sun Times, The Los Angeles Times, The Miami Herald, The Orlando Sentinel, The Indianapolis Star and The Dallas Morning News.
The company also sells advertising and hyperlinks on its Web site, Interest.com.
In a separate press release, Bankrate announced it is also acquiring FastFind, an Internet lead aggregator based in San Francisco, for $10 million. Fast Find generates and sells consumer leads to lenders for mortgages, home-equity loans, auto financing and online education.
The acquisition rapidly propels Bankrate into the lead aggregation sector, Evans said. “We intend to leverage our consumer Internet traffic to enhance the FastFind lead generating platform,” he said.
According to a recent Borrell Associates research report, the mortgage industry will spend $2.5 billion in online advertising in 2005. The Borrell analysts expect that figure to more than double to $5.2 billion by 2009.
Both transactions are expected to close on or about Nov.30.
Bankrate management will hold a conference call later today at 2 p.m. Eastern Standard Time to discuss both acquisitions. To access the call, visit www.bankrate.com/investor-relations.
In response to the developments, Bankrate has issued new 2006 financial guidance. Assuming both transactions close in 2005, the company expects 2006 revenue to be in the range of $78 million to $79 million, and expects pre-tax income to be in the range of $22 million to $23 million. Pre-tax earnings per share for 2006 is expected to be between $1.22 and $1.27 on a fully diluted basis.
Bankrate owns and operates Bankrate.com, an Internet consumer banking marketplace.
Bankrate stock (NASDAQ: RATE) traded at $31.29 a share this morning.
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