Dye & Durham “evaluating options” following CMA decision on tmgroup

Dye & Durham have stated that they are “evaluating options” – including an appeal – following the CMA’s decision on Wednesday that it must sell tmgroup, which came after its in-depth investigation identified competition concerns.

The Canadian software giant stated that they “strongly disagree” with the CMA’s decision, adding that they “continue to believe that the acquisition of tmgroup would be beneficial for the search report market and its customers”.

They went on to say that they are “reviewing the CMA’s Final Report in detail and will carefully consider its options and next steps, including potentially appealing the decision”. Factors that Dye & Durham will take into account in considering its options include:

  • The minimal revenue and EBITDA generated by TMG compared to the Company’s global businesses;
  • A review of the detailed reasons published by the CMA;
  • The advice it receives from financial and legal advisors; and
  • The Company’s focus on other priorities, in particular, the Company’s focus on closing the LINK transaction.

What has been said by the CMA?

Following a Phase 2 merger investigation, the CMA found that the acquisition of TM Group by Dye & Durham substantially lessens competition in the supply of property search services in England and Wales.

Dye & Durham, an international provider of cloud-based software and technology solutions, announced the £91.5 million purchase of Swindon-based TM Group in July 2021. Both businesses offer property search services to clients in the UK under a variety of different brands.

The firms chose not to notify the CMA about the deal but, as part of its ongoing monitoring of mergers and acquisitions, the CMA identified potential concerns and began an initial investigation in October 2021. It was referred for an in-depth investigation, overseen by an independent inquiry group, in December 2021.

The inquiry group considered a wide range of evidence, including from the merging businesses’ own strategic documents and a survey of customers, as well as extensive information provided by customers, competitors and other industry players.

The firms were close rivals before the merger and the evidence shows that the combined business would be the largest provider in the market. The CMA also found that the merger would only leave two other large national suppliers in the market and that competition from smaller suppliers would not offset the competition lost by the merger.

The CMA therefore concluded that the merger “would reduce competition and could lead to less innovation, higher prices and lower quality services in the market”.

To address this loss of competition, the CMA concluded that Dye & Durham must sell TM Group to a suitable buyer to be approved by the CMA.

Richard Feasey, chair of the independent CMA group conducting this inquiry, said on Wednesday:

“The merger of 2 of the biggest players in this market would be bad news for anyone buying or selling property in England and Wales.

Competition drives innovation and keeps prices down. Without it, we can pay more for worse products and services.

To address our concerns, Dye & Durham must sell TM Group in its entirety to a suitable buyer.”

tmgroup said in a statement:

“Whilst not an outcome we agree with or would have wished for, tm group respects the decision made and will continue to fully cooperate with the CMA as we work with both them and Dye & Durham to identify a long-term investor that matches our own ambitions to continue to deliver the very best solutions in the market.

Throughout the period of review, tmgroup has continued to be managed as a separate business and has continued to invest in it and deliver the types of technology innovation and service that are synonymous with the tmgroup brand, and we want to reassure all of our customers and employees that this will not change as we go through the next phase of this process.”

For more information, visit the Dye & Durham/TM Group merger inquiry page.

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