ASX-listed hipages Group has acquired New Zealand online tradie marketplace Builderscrack for A$11.8 million in cash and equity.
The deal gives hipages (ASX:HPG) access to a NZ$26 billion total addressable market in addition to Builderscrack’s 4,000 active tradies and 200,000 registered homeowners. The Kiwi marketplace saw 95,000 jobs posted on its platform, worth NZ$67 million in FY21. The business was founded in 2007 by General Manager Jeremy Wyn-Harris, Mark Dickson and Keith Roberts.
The business generated revenue of NZ$2.6 million last financial year, up 24% on a year earlier and delivered NZ$1 million EBITDA at a 37% EBITDA margin.
Builderscrack’s parent company MyQuote Limited is being acquired with 80% funded through existing cash reserves and a 20% equity component.
Hipages CEO and co-founder Roby Sharon-Zipser said the deal makes hipages Group the clear trans-Tasman market leader connecting trusted tradies to homeowners.
“Jeremy and the Builderscrack team have built a great business around a strong technology platform and an incredibly loyal tradie base,” he said.
“We will supercharge their growth by leveraging the strategic and operational experience we gained from scaling our business in Australia, as well as helping them to grow their brand to capture the huge market opportunity in New Zealand.”
Sharon-Zipser sees massive potential in his new Kiwi offshoot, which, despite being the market leader, has a less than 1% share of its highly fragmented TAM.
He believes hipages will unlock additional revenue synergies through business model optimisation and adjacent opportunities, initially focused on optimising Builderscrack’s sales and marketing operations. The Builderscrack leadership team and brand will stay once the deal is completed.
Builderscrack GM Jeremy Wyn-Harris said they had created a brand that resonates strongly with New Zealanders.
“We have built our business and technology from the ground up,” he said.
“As Australia’s leading online tradie marketplace, hipages Group is a natural partner for us, and joining forces with Roby and his team will enable us to take our business to the next level. We look forward to learning from them and sharing ideas, as well as rolling out new products and services to add value for our tradie customers.”
The new acquisition follows on from hipages making a strategic investment in property management technology platform Bricks + Agent, as well as the roll out of Tradiecore, its field service software solution.
The company said that for the seven months post completion in FY22, Builderscrack will contribute A$2.3 million to hipages Group revenue and will not have a material impact on hipages Group’s EBITDA and EBITDA margin.