MyHome.ie, one of Ireland’s leading online property websites was sold for €50m to The Irish Times, owner of Ireland.com.
RTE.ie reported that MyHome.ie expects full year profit of €2.5m on sales of €6.2m. So the Irish Times paid roughly 8 times sales and 20 times earnings for this company. To be sure, after shelling out €50m The Irish Times must have some plan to inject more value into MyHome to recoup their investment.
As Michele Neylon mentions, the Irish Times have a successful record of monetising their online properties through subscription services. You don’t have to go too far left field to see that property buyers may be quite willing to fork out €X to view 100 properties or €Y for unlimited access for one month.
However, I am more interested in the market timing of the sale. I wonder whether the rationale for selling has anything to do with the insiders’ view of the Irish property market itself. Owned by Ireland’s top 3 estate agents, MyHome.ie generates fee based income based on property listings from over 700 estate agents nationwide. As a standalone business MyHome.ie is highly exposed to the health of the property market itself.
As every taxi driver and his dog will tell you, the Irish property market has been red hot for quite some time now (and of course we all learnt from the dot.com bubble that when the taxi man and his dog are giving investment advice it’s the perfect signal to turn to cash – or did we?). I have long believed that the longer this particular ‘boom’ goes on the more likely that the market will overshoot dramatically to the downside when the end finally comes.
The sale of MyHome.ie may well turn out to be an even more shrewd move on the part of the vendors than the €50m price tag suggests – I just wonder if MyHome.ie would fetch such a valuation in a year or so?