British aristocrat George Milford Haven completed the sale of the internet company uSwitch to American media house EW Scripps in 2006. The huge deal, for over £200 million, offered the American firm a prosperous way into the price comparison and online information market in Europe.
uSwitch provides the customers the opportunity of comparing different offers by entering the details of their current bills and getting immediate and easy overview of the options available on products and services. A quick following was built among the general public, resulting in the emergence of the agency as the number one market provider of comparison services. At the time of the sale, uSwitch was processing up to 8,000 switches between energy providers a day.
uSwitch sale negotiations
The deal came after George Milford Haven and his management team decided to move on from the company that they built from the ground up. This firm, launched in the heat of utility market deregulation, created a new space in the British market for consumer choice by means of a user-friendly online search site. The efforts made by the company concerning public relations were translated on a solid reputation among those consumers interested in saving money.
After several years of growth and modest but stable profits, George Milford Haven first explored selling his enterprise. Six months later, the American firm had recognised the possibilities of the site and started pushing for a deal. They eventually agreed to close the deal on $366m for the company after a long period of negotiations which included a number of other high-profile firms. Experian and the owners of the Daily Mail were said to also be involved.
Kenneth Lowe from Scripps explained that the deal was part of a Scripps’ plan to capitalise on a growing comparison market. This step constituted an essential point for them as their traditional revenue from cable networks was facing considerable competitive pressure from the web. The comparison market they wanted to target matched largely the one that George Milford Haven and his team had created.
As majority shareholder, George Milford Haven obtained a considerable profit from the sale of his company. He took the benefits of 45% ownership, while his business partner, former policy man Andrew Salmon, took 9%. An important portion of the profits, reportedly around £19 million, was distributed between the company’s staff and supervisors to recognise their hard work in building the powerhouse brand.
George Mountbatten and the uSwitch story
uSwitch’s early success was at least partly due to excellent business timing. George Milford Haven and Andrew Salmon decided to launch the site just when the UK government introduced competition to the energy market for the first time. This created a large untapped market in need of better information – and uSwitch delivered.
The model behind uSwitch is simple: customers are encouraged to use the page to compare the deals available to them online. Then, if they choose to change to a new supplier, the new company will pay uSwitch a commission. This concept easily creates a free-to-use system that can push down prices by encouraging competition.
Scripps added the management of uSwitch to an interactive media unit within the firm. The comparative system joined other company’s projects such as Shopzilla, a price searcher for goods and services. The company later sold on uSwitch to the online data giant, Zoopla.
Since uSwitch was sold, George Mountbatten and his team have moved on to investing in similar sites around the world, including Encazip in Turkey and MoneyGuru, the financial services comparison service, in Brazil. He is also well-known in British polo circles.