Today, we are thrilled to announce Modernize has been acquired by QuinStreet, Inc., a leader in performance marketplace products and technologies. “Modernize Home Services” will serve as QuinStreet’s flagship brand in home services going forward, advancing its mission to set the standard for transparency and trust in the home improvement and home services selection process, enabling millions of homeowners to make good and confident decisions.
The market for home improvement and other home services is enormous, with consumer spending on professional home improvement alone estimated at more than $200 billion in 2019. Costs for typical home improvement projects such as installing new windows, remodeling a bathroom, replacing gutters, installing a solar power system, and other home projects typically range from thousands to tens of thousands of dollars. The process of identifying and selecting a qualified product and service provider can be complicated and time-consuming for homeowners. Conversely, reaching and communicating with homeowners can be difficult and expensive for providers.
Modernize Home Services’ vision is to solve problems on both sides of the market and simplify the process; the business brings unprecedented depth, capabilities and reach to do so. Modernize Home Services will initially operate in more than 15 high-value, high-consideration home segments, including new and replacement windows, solar installation, roofing, heating and air conditioning, siding, bathrooms and kitchens, new and replacement gutters, home security, and more. The business brings a network of more than 1,000 contractors and providers across all segments, offering broad geographical coverage and choice for homeowners. Modernize Home Services also has extensive marketing and reach in digital media through QuinStreet’s unprecedented performance marketplace capabilities and presence, providing opportunities to engage with and service homeowners in all its major channels. Over the past 12 months, the combined business connected more than 3 million homeowners with home service professionals for their projects.
Modernize Home Services enables homeowners to be matched with up to four home service providers based on their unique project requirements and location. Homeowners receive access to a resource center with aggregated and verified project reviews related to contractors as well as information on accreditations, Better Business Bureau profiles, and Google Business profiles. This valuable data inspires homeowner confidence as they plan projects and connect with contractors.
Likewise, QuinStreet and Modernize service provider clients will now have the ability to reach new homeowners through one convenient platform and to receive important consulting and analytical insights on their businesses. After matching, Modernize Home Services facilitates communication between the homeowner and home service provider, soliciting feedback from both parties throughout the project lifecycle to ensure an efficient and transparent process.
“Modernize has developed a highly-recognizable brand and deep relationships with contractors in select segments of the home improvement ecosystem,” notes Alan Godfrey, senior vice president of QuinStreet’s Modernize Home Services client vertical. “We are very excited to be a part of QuinStreet’s expanded home services business and to have the opportunity to serve more clients and homeowners in a greater number of market segments.”
“Home improvement and related home services represents an enormous addressable market opportunity for QuinStreet’s future growth,” explains Doug Valenti, QuinStreet’s chief executive officer. “Modernize Home Services will combine our two organizations’ capabilities to fuel expansion at scale for many years to come, while providing unparalleled consumer choice.”
The consideration paid for the acquisition totaled $67.5 million in cash and notes payable over five years, subject to certain closing adjustments. Modernize is expected to add $50-60 million to QuinStreet FY2021 revenue, and contribution margins immediately accretive to Company EBITDA. More details on the transaction will be shared in QuinStreet’s FY2020 Q4 earnings call in August, 2020, and in subsequent reports filed with the Securities and Exchange Commission.
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