Two former call centre workers are to make more than £6m each after agreeing to sell the price comparison business they started four years ago to the newspaper group Daily Mail & General Trust for £22m.
For DMGT, the acquisition of SimplySwitch marks a further shift away from the company's traditional business model of selling adverts in newspapers. DMGT has bought a series of websites that take classified advertising.
Karen Darby, 46, and Alistair Tillen, 39, were working together in telemarketing on accounts for energy companies when they had the idea of offering consumers "independent" advice and a choice of providers. They started SimplySwitch in 2002, first providing price comparisons for gas and electricity suppliers and later adding areas such as credit cards and telephony.
The service is free to users but gets a fee from companies that consumers switch to when they use its website or helpline. Gas and electricity companies have increasingly stopped promoting themselves through adverts or direct mail and use price comparison sites instead.
The deal mirrors the acquisition of its bigger rival uSwitch, earlier this year, by the US newspaper group EW Scripps, though the value of that transaction was a much heftier £210m.
Mr Tillen said that, like uSwitch, his business emphasised a call centre option for consumers not comfortable with transacting online. SimplySwitch got start-up financial backing from Bridges Community Ventures, which invests in projects with a social element, because it sited its call centre in a deprived area - Croydon in south London.
He said SimplySwitch had relationships with all the major suppliers, but he insisted it would recommend an offer even if it did not stand to benefit. He would not disclose the level of commission it received.
Mr Tillen said: "We have very aggressive growth targets for phase two of our business plan. We didn't want to exit but find a bigger partner to help us deliver these plans."
Mr Tillen and Ms Darby, along with other management, own 60 per cent of the business and Bridges Community Ventures owns the other 40 per cent. DMGT is providing £16.5m in cash upfront, with a further £5.5m dependent on hitting targets over the next three years. Bridges will cash out completely, taking £8m. Mr Tillen and Ms Darby, co-chief executives, will take £4m each now, with other managers collecting £500,000 immediately.Reuse content