Hatched, the online agent founded by Adam Day, has been sold to high street giant Connells.
The sale, which completed this morning, is the first of an online agency to a large ‘bricks and mortar’ corporate.
Connells said: “Hatched will bring complementary capabilities including first-hand knowledge and experience of this developing sector. The acquisition is designed to expand Connells into towns and cities not currently covered by its existing estate agency operation and will see Hatched become an integral part of the Connells network.”
Hatched will continue to trade under its existing brand with founder and managing director Day remaining in charge of operations.
The sum paid by Connells is undisclosed. It is, however, described as “significant” although not thought to be in the same region as the £250m quoted as Purplebrick’s likely stockmarket valuation.
Connells Group CEO David Livesey said: “The acquisition of Hatched represents a natural progression towards further enhancing our online proposition and wholly complements our strategy to expand our high street footprint.
“We are entirely committed to our branch network – evident through our recent acquisitions and our programme of 114 branch openings over the last 18 months – and I can confirm that this acquisition does not signal a shift away from traditional high street estate agency practices and values by Connells.
“Indeed, we believe that this allows us to continue to innovate in the digital space and provide a unique combination to enable us to best service customer needs.”
Day said: “We are delighted and proud to say that we’re now part of the Connells Group whose values of great estate agency practice are perfectly aligned with ours.
“As one of the original online estate agents in the UK, it has always been my intention to create an estate agency offering that utilises the power of the internet and technology whilst complementing, and not replacing, estate agents.
“This partnership will allow us to compete as this sector develops and to deliver a first class estate agency service and unrivalled online customer experience.”
This latest deal comes one month after Connells Group announced the acquisition of Gascoigne Halman, taking the Connells Group’s high street network to 540 branches across the UK.
Other recent acquisitions include Peter Alan, the largest estate agency in south Wales with a network of 26 branches, Adrian Cole & Partners, Cartwrights in Stafford, Harrisons in Lincoln, Platinum lettings in Crawley and a several other acquisitions of lettings books across the country.
Connells, which also owns Sequence, said it “remains open to approaches from existing sales or lettings businesses looking to sell or who wish to grow as part of a wider group”.
Comments (26)
Massive change happens in most industries – Cameras (film anyone!) Kodak dint change fast enough, Phones landlines or Nokia, Air Travel – Low cost airlines were said to be sub-standard etc etc
I seen this in photography with rights managed images (RM) (more costly) Vs Royalty Free.
The RM crowd shouted from the roof tops about quality and the experience of the photographer etc. How images buyers wouldn’t go for these sub-standard images….
But prices matters and GOOD PR matters too.
These days you will probably never buy a RM for your agency adverts.
Now you might just say that houses are not the same as a property and you are right but in the early days its all about being the alternative and then the consolidation comes and then the service levels rise to a point that they can offer a more streamlined service than the incumbents (hight street). Yes you will have customers for years to come but the industry will be totally different and the prices will be lower than they are now (but higher than the onliners are at the minute)
You have probably used RF images, have a camera on your phone and travelled by a low cost airline…and then you say things should stay the same?
Strange acquisition with only 400+ properties on the books compared to PB’s 4000+.
But then … If Connells believe in the ability of Adam Day, his management team and their network of agents, scaling up Hatched will cost them a fraction of what it could cost to buy or compete with an established market leader in 2/3 years time.
I’ve repeatedly said on here that onliners/hybrids will expand rapidly as TV advertising continues to educate sellers that there is an alternative to the traditional high street EA. Like it or not, sellers in their droves will opt for a low fee option once the likes of PB are seen as a genuine and legitimate alternative. Those EA’s on here denouncing that low fees will automatically always = low service need to take their heads out of the sand.
PB will spawn many local/regionally based equivalents who will find their pricing structure and marketing options far more plausible to sellers than they would have been only 12 months ago.
I’ve said before that the real battle is not about onliners v traditional it’s about fees.
Many sellers will decide they still want to deal with a local EA but, increasingly, their awareness that alternative agents offer huge fee savings will inevitably lead to downward pressure on traditional fees.
Local onliners and hybrids will add to that pressure.
Harree …you say..
“sellers in their droves will opt for a low fee option once the likes of PB are seen as a genuine and legitimate alternative.”
………..Will that mean that they could increase their fees when they reach such a commanding position?
Its not about fees!
Its about awareness of service offering and whether it meets the customers requirements. The vast majority of sellers see through the false promises of the online agents and are not prepared to pay upfront even £500 if there is no certainty their property will be sold.
Performance data will prove that actually the online agents are more costly per sale than traditional agents. If anyone’s interested I can explain this!
I don’t disagree with any of that, I was asking Harree (who thinks that sellers in their droves will opt to use PB) whether, if he is right, thinks that an online company could up their fees if they got into a market leading position and were dealing with “droves” of sellers.
I personally think they will struggle to get to that position, based on their service, but was asking Harree his thoughts on a matter if his analogy turned out to be correct.
More than a £1?…
Could this be the start of an ‘acquire and eliminate ‘strategy by the corporates to kill-off a few onlines? – not that having 460 listings is much competition !
Actually, probably not as I don’t think their that smart !
they’re ! (blinking spell-check)
if they paid more then £1 then, yes, it is significant.
Good though, as this spells the end of get rich quick internet agents. People who create online agents have no real love for the sector and so can be bought fairly cheaply.
Once purple bricks stop t.v. adverts they are ‘gone’ as welll.
PB will float and will have plenty of money to keep the adverts going. Of all the online businesses I can’t see how PB could possibly be sustainable
The agency dot com frenzy is really warming up….I expect there will be a lot of buy ups in the coming months/years as online buys online and high street buys online to create less online options for the public……….could they then put their online prices up as there would be less for the public to choose from?…..Zoopla made it to no 2 by acquisitions?
Shall we have a sweep on the acquisition terms?
I’m gonna guess £1m, paid mostly in Connells stock, with a 5 year £100k p.a. salary for Adam.
Higher or lower?
Careful, Tristramboris – if you run a sweep on here, and take a GUESS at anything, a certain angry-type onliner from Essex gets all shouty and excited that you’ve MADE A BET and wants you to donate to his Home for Destitute Estate Agents…
…could cost you the grand sum of… bu99er all – but he will try to make a story out of it ;o)
Gotta hand it to Quirk’s marketing team, but why do you lot let him get under your collars?!? 😉
I think you’ll find it is COMPLETELY the other way round…
That did make me laugh PeeBee!
Trust me – I’m an Estate Agent!
True but not a very good one.
If that’s your opinion… good for you.
I’m certainly not going to try to convince you otherwise.
Some dawgs just can’t be taught.
All these press announcements seem to be just about how much this online agent raised in funding, or what they sold to (in Hatched case). None of this means anything – as the money soon runs out for failed business models. So lets see some ‘results’ from the onlinies and let them speak for themselves!
Question 1. What proportion of listings did you actually sell?
Question 2. How long were they advertised prior to the sale. (I’m not talking about the average length of time of all your listings).
Question 3. What proportion of your litsing failed to sell but then went on to list with a second agent?
Question 4. Of properties you managed to sell what was the average price reduction from the first listed price?
Let’s see some of these answers from the online agents before we give them any more column inches!
Congratulations to Adam. All very interesting and shows the changing face of the U.K. Estate Agency market. “The big boys” are getting bigger, so much acquisition activity at the moment that if I was running my own independent I would be more concerned as to how this would affect me than which portals to advertise on. Money has been spent before with players entering into the market (Prudential etc.) but this time it is different as the players who are making acquisitions do know what they are doing and have pockets full of money…. Or at least should do! I bet Russell wished they had made a bid for his business! If Connell’s have made this move then surely the other large groups have to follow suit? Makes a mockery of the Haart survey about online versus traditional as well as no doubt they will now have to re-enter this space in the market. Very interesting times ahead.
Adam has done very well here. Just goes to show that the leading online agents are already considered too expensive for the incumbents to invest in, let alone acquire
Congrats to Adam, but did Sequence really need to buy an online agency?
Surely this smacks of desperation and the motive purely driven by fear they’ll be left behind.
Bricks are the only contender in this market for one reason only – they have remained close to the traditional estate agency model of local people on the ground. Any trad agency can do this and doesn’t need to buy an online ‘private listing equivalent’ website to do this.
IMO, pure online agencies will fail and traditional agents have nothing to worry about if they are willing to embrace the change in consumer habits. Namely, design your service around the person, not the property!
Agreed, the online model is still very young and Hatched isn’t a household name, or anywhere near. Surely they could have started their own, with time to grow organically alongside their existing model, rather than pay a lot of cash for what is only a listing site.
I, for one, will be interested to see how Hatched is tagged on to the Sequence brand, taking into account the highest fee charged by H is £795 and Barnard Marcus and some of the other S brands charge much higher fees.
I wonder if they will go the purple bricks/hybrid route or keep the H brand exactly the same with slight modifications.
This is going to be interesting to see which way this is taken.
Me next! Me next!! I’m over here!!!