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British online estate agent Purplebricks eyes IPO in 2016

Reuters - UK Focus

By Esha Vaish

May 12 (Reuters) - Purplebricks, a British online estate agency backed by fund manager Neil Woodford, plans an initial public offering in the second quarter of 2016, a non-executive director of the company said on Tuesday.

Before listing on London's Alternative Investment Market (AIM), the company plans to raise up to 10 million pounds ($15.7 million) in its third round of financing, Paul Pindar, who owns about 5 percent of Purplebricks, told Reuters.

"Our view is that an IPO in 2016 is a natural evolution for the business," said Pindar, a former chief executive of outsourcing group Capita Plc (LSE: CPI.L - news) .

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He declined to estimate the company's value.

A number of British real estate agents, including Hunters UK and easyProperty, are looking to go public to tap into strong equity markets, healthy letting demand and a sharp rise in house prices over the past two years.

The Conservative Party's unexpectedly decisive victory in last week's election is also expected to boost investor sentiment, with pent-up demand rushing back over the rest of this year and into the next.

Purplebricks was founded in 2014 by brothers Michael and Kenny Bruce. Like other online estate agents, it aims to win customers by providing agency services at a fraction of the cost charged on high street.

For every transaction, the company says it charges a flat rate rather than a percentage of the property value.

Concentrating first on properties in the southeast, it expanded into other parts of England and Wales before launching in London this month. South African entrepreneur Errol Damelin, founder of payday lender Wonga, is also an investor.

Pindar said he expected the company's pre-IPO financing round to take place in the third quarter of 2015. Its first two financing rounds, held in the first and third quarters of last year, raised 3 million and 8 million pounds respectively.

Purplebricks has hired Canaccord Genuity (Other OTC: CCORF - news) to advise on its IPO. ($1 = 0.6388 pounds) (Editing by Simon Jennings)