UK real estate agency Purplebricks is set to expand into the US and has raised £50m through a share issue to fund the expansion reports Estate Agent Today.
In an announcement to shareholders the firm said it would place the new shares at 220p - far above the 100p at which it floated 15 months ago, and a sign of its long-term bull run.
The company has also confirmed that some 22,727,272 shares had been placed raising approximately £50m before expenses.
A statement from the company reads:
“The net proceeds of the Placing (expected to be up to £48.7 million) will be utilised by the Company to enable Purplebricks to launch its business in the US, initially by establishing itself in a number of key states.
“The Directors intend that the first stage of the roll out of the Purplebricks proposition in the US will begin in the second half of 2017. The Directors consider that there is a significant opportunity for the Company to make a meaningful impact on the US real estate market, which is estimated by the Company's management to be worth approximately US$70 billion annually in total real estate commission income.”
Michael Bruce, group chief executive officer of Purplebricks, says in the statement:
"We are proud to announce our plans to launch Purplebricks in the US, a market we estimate to be worth some US$70 billion in annual estate agent commission.
“Our customer proposition of high quality service and value, delivered through the combination of technology and people, is driving irreversible change in the UK and Australian markets. We are confident that with our understanding of the US market and our experience from having already launched in two markets Purplebricks can build a significant business in what could be one of the most fascinating and rewarding real estate markets in the world."