PropertyIQ's proposed Terralink takeover anti-competitive - commentator

PropertyIQ NZ, a joint venture between state-owned Quotable Value and Australia's RP Data, is seeking clearance to buy local geospatial data firm Terralink International.

The property information company has applied to the Commerce Commission for clearance to buy the business and assets of Terralink in an effort to boost scale and its ability to compete with global competitors, according to its application. Among the reasons cited for the acquisition is that it will open access to funding for national and international growth.

Property commentator Alistair Helm is critical of the plan.

"The property data business has for many years been a competitive environment with Property IQ and Terralink offering competing products to serve the various industries as well as the consumer," the Realestate.co.nz CEO turned Properrazi.co.nz founder told NBR ONLINE.

"Within this consumer-focused arena, Terralink partnered with Realestate,co.nz in 2009 to create Zoodle as a direct competitor to QV, to provide property reports on individual properties online," he notes.

Terralink in 2012 bought out the other shareholders to take 100% ownership of Zoodle.

"To now see effectively Zoodle and QV merge is a clear diminishment of the competitive marketplace and is naturally of great concern to property buyers," Mr Helm says.

"PropertyIQ expects that the proposed acquisition will allow it to realise significant savings and increase efficiency (reducing both fixed and variable costs)," Property IQ says in its application.

"The effect of the acquisition will be that de-duplication of infrastructure and customer support together with resulting efficiencies will free up resources which can be deployed to develop further new innovative products and services to customers across all sectors and potentially for export, especially in location business intelligence and spatial information technology services," it says

The antitrust regulator has to decide on whether a proposed merger will reduce competition in a market, and can only approve it if satisfied the transaction won't substantially lessen competition.

PropertyIQ reported a profit of $1.04 million in the six months ended Dec. 31, 2011, on sales of $5 million, according to part-owner RP Data's financial statements, lodged with the Companies Office.

With reporting by BusinessDesk