Britain's biggest online estate agent is moving into Europe for the first time by acquiring a stake in its most prominent German counterpart.
Sky (Amsterdam: BK8.AS - news) News has learnt that Purplebricks (LSE: 139215.L - news) , which has a market value of more than £650m, will announce on Monday that it is to become a shareholder in Homeday through a joint venture with the German media giant Axel Springer (Swiss: SPR.SW - news) .
Sources said this weekend that the deal was likely to be structured as a 50-50 partnership between Purplebricks and Axel Springer, which is already a big investor in the British property group.
The transaction will see the two companies invest €25m (£22m) in order to purchase a 26% stake in Homeday, which has a 50% share of the German online estate agency market.
Purplebricks and Axel Springer would then have an option to buy another 28% of Homeday next summer, potentially giving their JV a controlling stake.
Homeday is understood to have recorded revenues of about €4m (£3.5m) last year, with that figure expected to double in 2018.
The transaction will be the latest overseas expansion announced by Purplebricks as it diversifies its revenue base.
In July, it announced plans to buy DuProprio, a Canadian real estate company, and its English language subsidiary, ComFree, for almost £30m.
The acquisition underlined the land-grab opportunity for international growth even as Purplebricks grapples with the losses arising from heavy investment in marketing and brand awareness.
It already operates in parts of the US.
The company lost £26m on a pre-tax basis in the year to April, but Michael Bruce, its chief executive, has said that the increasing brand awareness justifies the outlay as "we continue to win over consumers to the modern way of buying and selling property".
In its last financial year, almost £10bn-worth of UK properties were sold on its platform.
Axel Springer invested £125m in Purplebricks in March in return for an 11.5% stake, with its shares having traded down following suggestions - denied by the company - that it had overstated home sales figures.
Purplebricks' expansion contrasts with the crisis at a number of traditional UK estate agents including Countrywide (Frankfurt: A1H56R - news) , which was forced to go cap-in-hand to investors during the summer to stay afloat.
Purplebricks could not be reached for comment on Sunday.