Fairpoint buys Moneyextra.com for £1

The move follows the departure of former Moneyextra MD, Richard Mason, previously Moneysupermarket.com's director, who left quietly in September 2009.

In March 2010, as part of its preliminary results announcement, Fairpoint outlined a strategy to create a broad based financial solutions business serving the needs of the financially stressed and specifically to generate 20% of revenues and gross profits in FY 2010 from non-individual voluntary arrangement sources (2009: 12%).

Fairpoint said that the acquisition of Moneyextra.com, together with other initiatives taken this year, should allow it to accelerate the progress of its strategic objectives. The acquisition is expected to increase non-IVA revenues to approximately one third of group revenues on an annualised basis before revenue synergies from the final quarter of FY 2010 onwards.

In a statement, Fairpoint said: "The transaction is structured so that Moneyextra is contributing its platform and Fairpoint its lead base and infrastructure with the eventual purchase price being dependent on success in the form of the profits generated in Moneyextra.

"Initial consideration is £1 with up to a further £1m of working capital being made available to Moneyextra in the current financial year to replace existing borrowings, fund integration activity and support revenue growth. Further earnout consideration is payable to the vendors contingent on a multiple of 49% of the future earnings of the Moneyextra business. On completion the directors expect the ultimate consideration to be approximately £8m."

Chris Moat, CEO of Fairpoint, said: “The income and expenditure review we undertake with customers gives us a clear insight into where customers can reduce their bills and the addition of Moneyextra to the group provides us with a clear way of delivering savings to customers on a range of product and services.”

Simon Taylor, chairman of Moneyextra, said: “This is an exciting deal for Moneyextra and our team. The natural synergies and shared market knowledge between the two companies will enable us to help more consumers improve their finances and for the group to compete on a profitable footing at a time when the price comparison market is commoditising.”