MoneySavingExpert: Started for £100, Sold for Up to £87M — and 31% of It Hung on Non-Financial Terms

In February 2003, financial journalist Martin Lewis launched a website for £100. On 21 September 2012, that website, MoneySavingExpert.com, was sold to the listed company MoneySupermarket.com Group for up to £87 million.

The headline number draws the eye, but what makes this case interesting is how the consideration was structured rather than its size. Read the acquirer’s regulatory announcement (RNS) from June 2012 and the £87 million is not a lump sum. £60 million was paid at completion: £35 million in cash plus 22,123,894 MoneySupermarket.com shares issued to Lewis. The remaining £27 million was deferred until after the third anniversary, and payment depended on non-financial criteria and the acquirer’s discretion.

Thirty-one percent of the sale price was tied to something other than hitting a revenue or profit target. What that structure was protecting is the heart of this case.

The business at the point of sale

FY2011 drew roughly 39 million unique visitors and about 277 million page impressions. Around 246.5 million weekly-newsletter emails were delivered over the year. As of April 2012 there were about 42 permanent staff.

Eight-tenths of revenue fell through to EBITDA. There is no inventory, no logistics and no in-house financial product, income comes from commissions on referring readers to financial institutions. Forty-two permanent staff against £15.773M of annual revenue tells the same story.

Divide £87M by FY2011 EBITDA of £12.642M and you get about 6.9 years’ worth; against the £60M paid at completion, about 4.7 years. It is a large deal by the standards of the cases documented here, but the multiple itself is not extraordinary for a media business.

The “non-financial criteria” attached to £27M

The most distinctive line in the RNS is that the deferred £27 million turns on non-financial performance criteria and the acquirer’s discretion. This is not the usual earnout, where hitting revenue or profit targets releases the payment.

The same disclosure states that the acquirer intends to preserve the editorial independence of MoneySavingExpert, free of commercial considerations, through an agreed editorial code. Lewis himself said in press coverage that the deal would see the site retain its editorial independence.

The buyer’s position explains why. MoneySavingExpert’s value rests entirely on readers believing the site is on their side. The acquirer is a company that makes its money comparing exactly those financial products. The moment readers sense that recommendations have tilted toward MoneySupermarket, the asset dissolves. For the buyer, protecting editorial independence was the same act as protecting the investment.

Lewis was tied down in parallel. He became an employee as editor-in-chief, his shares carried a three-year lock-up, and he granted a three-year licence for the use of his name and image on the site. The deferred £27 million also sits after year three. The number three appears in all four places, share lock-up, name licence, deferred payment, and the intended tenure of the arrangement. When you buy a media property where a person’s name is the brand, what you are buying is neither the domain nor the archive but that person’s continued presence, and the contract says so.

Media properties thinning out after the founder departs is not unusual. Investor Junkie, sold for $5.8M and then resold for $1.3M, is the contrasting outcome in the same personal-finance niche. Change the owner and the way the content is made changes, search rankings follow.

The £100 — and the nine years

“Started for £100, sold for £87 million” is a compelling summary, and taking it as the lesson gets the facts wrong. What actually did the work here was not the low startup cost but the nine years.

From 2003 to 2012, Lewis kept publishing practical guidance for British consumers switching insurance, credit cards, utilities and bank accounts. The figure of 246.5 million newsletter emails delivered in a year is the product of subscriber count multiplied by persistence. Bringing search visitors onto a newsletter and staying in contact with them is the same structure as a mental-health information site founded in 1995 that reached 7 million monthly visits with no full-time staff. In both, the accumulated years are the asset.

What is worth copying, then, is not the £100 but designing the time it takes an individual to build trust as the core asset of the business. And because that is a question of years rather than capital efficiency, money cannot shorten it.

What this case does not tell us

Some limits worth stating plainly.

Top of the list: whether the £27 million was actually paid cannot be confirmed from the sources cited here. The condition, non-financial criteria and the acquirer’s discretion, is disclosed, but no document among these sources follows through to the determination three years later. “Sold for £87 million” is, strictly, “a conditional agreement worth up to £87 million was reached.”

Part of the consideration, moreover, was equity. The value of 22,123,894 shares moves with the market. Lewis sold more than half his holding in July 2015 for £25.2 million, an amount that depended on the share price at that moment. He did not receive £87 million in cash, and the same distinction matters just as much at individual-M&A scale.

This case is thin, too, on first-party data from the seller’s side. Revenue, EBITDA and visitor numbers all come from the acquirer’s disclosure. The operator was not publishing monthly figures. That is a different kind of evidence from the transparency of a personal blog that published monthly reports for two and a half years.

What carries over

The scale is nothing alike, but there are transferable points.

One is to separate the headline price from what is actually received and certain. Here 31% of the total was conditional, and part of the rest was stock. Comparing deals on headline numbers alone misreads what happened.

The other is reading, from the shape of the contract, what the buyer was trying to protect. The editorial code, the name licence, the share lock-up and the timing of the deferred payment all converging on three years is not a coincidence. What the buyer feared most was not missing a target but the asset becoming a different thing the moment it changed hands.

Any business whose revenue rests on reader trust carries the same fragility, at any scale. For a seller, the only way to protect nine years of accumulation is to design the transfer of that trust with the same intensity applied to the price.