OLX Brazil, the 50/50 joint venture between Adevinta ASA and Prosus NV, announces that it has completed the acquisition of Grupo ZAP, announced in March, for a total cash consideration of approximately R$2.9 billion. The investment has been equally financed by OLX Brazil’s two shareholders. The transaction received regulatory approval on 1 October by Cade, the Brazilian antitrust authority. As of today, OLX Brazil starts operating in the real estate market under the OLX, ZAP and Viva Real brands, with complementary positions to meet the different demands of end users, private advertisers and professionals within the sector.
CEO Andries Oudshoorn will continue to lead OLX Brazil while overseeing the two business units, OLX and ZAP, with operations running through the offices in Rio de Janeiro, Sao Paulo and regional branches. The combined entity will employ a total workforce of approximately 1,600 employees focused on reinventing Brazilians’ consumption model, of which 400 are tech specialists.
Andries Oudshoorn, CEO of OLX Brazil, comments: “With this acquisition, OLX Brazil strengthens its position in the Brazilian real estate market. Combining with Grupo ZAP will enhance the end-to-end experience for our users, professional customers and strategic partners. Our customers will benefit from integrating DataZAP's data intelligence together with the existing high volume of data from OLX real estate, which positions ZAP as an important source of information with respect to the Brazilian real estate segment. The acquisition will also drive value creation on other strategic verticals within OLX Brazil.”
New structure of the Real Estate vertical
With the acquisition of Grupo ZAP, OLX Brazil takes a leading role in the Brazilian online real estate market. Together, OLX, ZAP and Viva Real platforms list 14 million real estate ads, with an average of 70 million visits per month and more than 40,000 professional clients (real estate agents, brokers and developers). In 2019, Grupo ZAP had net revenues of R$232.4 million and EBITDA of R$-15.8 million, with an average of 28 million visits per month. Despite the negative impact of Covid-19, Grupo ZAP year-to-date revenues as of September 2020 are above those of 2019 for the same period, and the company is now already EBITDA break-even.
The transaction reinforces the strategic importance and relevance of the real estate segment for OLX Brazil and occurs at a time of accelerated digitalisation and overall growth in this sector, driven by historically low interest rates and attractive financing.
Andries Oudshoorn adds: “The offline marketing spend still represents about 70% of the investments made by players in the Brazilian real estate market. Therefore, we see huge potential for digitisation in this sector, with numerous opportunities to create integrated solutions that make the experience of buying, selling or renting properties simpler and safer.”
Brian Requarth, founder of Viva Real and former chairman of Grupo ZAP, says: “The real estate market is the largest asset class in the world, and is at the beginning of its transformation. The combination of our strengths will bring the Brazilian real estate market into the future. I am sure that OLX Brazil will be able to leverage its strong technology culture and traffic position to accelerate innovation and take ZAP to new heights."