Benchmark: 'Zulia' Worth $210 Per Share

The rumored merger is official. Zillow Z will be taking ownership of Trulia TRLA in an all stock transaction for $3.5 billion.

“A Zillow-Trulia merger would garner instant scale and be the dominant force in the online real estate market,” wrote Benchmark analyst Daniel Kurnos. What Kurnos dubbed “Zulia” could be worth $210 per share (39 percent upside).

Kurnos explained that the combined company could have revenue of $721 million and EBITDA of $152 million. The $210 estimate is derived with a 15 times EV/Revenue multiple. Cost savings will result from ending marketing competition and “the elimination of redundancies.”

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Although Benchmark thinks concerns are limited, it does raise the points that Zillow has sued Trulia in the past and Zillow has been adamant about staying out of the software business.

Shares of Zillow were last trading 3.4 percent lower on dilution concerns to $153.40, while Trulia shares were up 11.9 percent to $63.06.

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Posted In: Analyst ColorNewsM&AAnalyst RatingsBenchmarkDaniel Kurnos
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