The Queen's cousin, Lord Milford Haven, and a handful of internet entrepreneurs are to share a windfall of more than £200m following the sale yesterday of price comparison service uSwitch to the American media company EW Scripps.
Scripps has agreed to pay $366m (£210m) for the company after a two-month bidding war with rivals understood to include Daily Mail & General Trust, the credit reference agency Experian and several private equity firms.
Lord Milford Haven founded uSwitch, which enables consumers to compare the prices charged by utilities and telephone companies, in September 2000. Lord Milford Haven, 44, who is 459th in line to the throne, owns a 45 per cent stake in the company, worth £94.5m under the terms of yesterday's deal.
On launching uSwitch, Lord Milford Haven appointed Andrew Salmon, a former PricewaterhouseCoopers consultant, as chief executive officer. Mr Salmon, 36, and other uSwitch staff, who together own 9 per cent of the company, will share around £19m following the Scripps takeover.
The price agreed raised eyebrows. Uswitch makes its money when users switch utility provider through its site. Consumers pay nothing for the independent price comparisons but gas, electricity and telephone companies pay it a commission for each customer received. This year, however, it is only expected to make a profit of between £6m and £9m.
Kenneth Lowe, the chief executive of Scripps, said uSwitch would benefit from an increasing willingness among consumers to switch between service providers. On 1 March this year, the company processed 8,825 switches in the wake of price increases announced by British Gas. It has also begun to expand into areas such as credit card and loan comparisons, and is studying the continental European market. "We believe the uSwitch service and brand provide a sturdy platform on which we can expand into Europe and beyond," said Mr Lowe.
The £210m price tag dwarfs the £120m that ITV paid for Friends Reunited, arguably a more established business, in December, amid renewed interest in internet-based ventures.
Simon Nixon, the chief executive of Moneysupermarket.com, a price comparison service that specialises in personal finance, said he believed his business, which has already attracted interest from buyers, could now be worth an eight-figure sum.
"If we look at the multiple of uSwitch's profit and apply that to Moneysupermarket.com's profit of more than £30m a year, it gives us a valuation in the region of £1bn," Mr Nixon said.
Uswitch will be the first international venture for a new interactive media unit launched by Scripps last year. In the US, the company owns Shopzilla, an online service that helps shoppers track down the cheapest prices for goods and services.Reuse content