Purplebricks sold for a £1 following higher than expected turnaround costs

The deal will lead to job losses, with its chief executive Helena Martson, along with a number of other senior officials at the business, stepping down once the sale is completed.  

Purplebricks said the deal was the only one which had the certainty of funding the necessary speed of delivery and was supported by all its directors as well as major backer Axel Springer. It also said the deal would transfer its £33m liabilities to its new owner.  

The UK firm was first put up for sale in February after it warned costs from a turnaround plan had proved higher than expected and is anticipating a larger than previously guided adjusted loss before interest, tax, depreciation and amortisation of between £15m to £20m.  

Following the news of the sale, Purplebricks chairman Paul Pindar said: “It is the unanimous opinion of the board that the proposed sale to Strike is in the best interests of stakeholders and shareholders should vote in favour of the proposed sale.  

“This conclusion has been informed by the strategic review in which all options, including an equity fund raise, have been considered and an extensive formal sale process, which involved inbound and outbound approaches from and to interested parties within and outside of the industry.  

“I am disappointed with the financial value outcome, both as a five percent shareholder myself and for shareholders who have supported the company under my and the board’s stewardship. However, there was no other proposal or offer which provided a better return for shareholders, with the same certainty of funding and speed of delivery necessary to provide the stability the company needs.” 

Marston added: “When I became chief executive 12 months ago, my focus was a wholesale raising of standards within the business and to chart a course towards positive cash generation.  

“This included delivering £21m of cost savings, stabilising lettings, new revenue streams, raising our prices and much improved financial transparency and control. We have achieved many of these goals, but my view and that of the board in February was that we would be better placed to realise our full potential under private ownership.  

“However, the strategic review and formal sale process created increased uncertainty in the business resulting in a need to draw this process to conclusion, which has also been accentuated by the timing of expiry of our relationship which lets us provide pay later solution. 

“Taking the actions we did has allowed us to secure a solvent outcome, which protects the future of the business and the Purplebricks consumer driven brand, alongside the benefits of further investment. It has been a challenging and uncertain time but the passion and commitment of our people has been tremendous and I sincerely wish everyone the very best for the future.” 

Freston Ventures – the joint major shareholder of Strike – partner Sir Charles Dunstone, meanwhile, said: “We remain committed to the online model, which offers customers a much better experience at a far lower cost.  

“This is a positive outcome for anyone looking to sell their home and save money doing so. Purplebricks has dramatically changed the industry by driving down the cost of estate agency and we aim to combine its significant brand recognition with an even more disruptive business model. 

“In bringing together the two brands, we will supercharge Strike’s mission to democratise house selling by empowering customers to have more control over a process that has barely changed for 200 years.”