Debt consultant snaps up price comparison website

CONSUMER debt consultant Fairpoint has pounced on an East Yorkshire-based price comparison website. Fairpoint said it bought the UK's fifth biggest price checking website, Moneyextra.com, for an initial £1, potentially rising to £8m.

Beverley-based Moneyextra was founded in 1995 and has about four per cent of the price comparison market, employing 35 staff. Fairpoint works with cash-strapped consumers to work out repayment plans, mainly through Individual Voluntary Arrangements, which allow borrowers to pay less back to the lender and at a slower rate. It said the acquisition will allow it to broaden its business, and it will generate commission-based revenues based on directing consumers through to companies such as insurers and mortgage lenders.

"The income and expenditure review we undertake with customers gives us a clear insight into where customers can reduce their bills and the addition of Moneyextra to the group provides us with a clear way of delivering savings to customers on a range of product and services," said Fairpoint chief executive Chris Moat. "There will be some head office cost synergies, but the real rationale is about growth."

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Moneyextra recorded an operating loss of 1m on revenue of 3m in the 19 months to the end of 2009. It claims to cover more than 90 per cent of the market. Fairpoint has provided Moneyextra with 1m to replace borrowing, fund integration and support revenue growth.

Under an earn-out agreement, based on profits performance, Moneyextra directors could be paid 8m, with a maximum price of 15m. Simon Taylor, Moneyextra chairman, said: "This is an exciting deal for Moneyextra and our team."

Meanwhile, Fairpoint said trading in the first half of its financial year has been in line with expectations, with revenues and profits marginally ahead of last year.

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