Filing Flows › Zillow Group (ZG) › Takeover & LBO
Is Zillow Group (ZG) a takeover target?
A leveraged buyout at today's price plus 30% ($41.46 a share) would return a loss of about 2% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. Historically 4.6% of companies with its figures were bought within a year (0.92× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $41.46 | today's $31.89 plus 30% |
| × shares | 225.3 million | |
| = Equity value | $9.3B | |
| + Debt refinanced | $0 | |
| − Cash | $707M | |
| = Enterprise value | $8.6B | 76.4× EBITDA of $113M |
| Fees | $173M | 2% of the price |
| New debt | $622M | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $8.2B | 93% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $3.1B | $122M | $47.5M | −$90.9M | $712M |
| Year 2 | $3.3B | $130M | $54.5M | −$97.2M | $810M |
| Year 3 | $3.5B | $137M | $61.9M | −$103M | $913M |
| Year 4 | $3.6B | $143M | $69.8M | −$109M | $1.0B |
| Year 5 | $3.7B | $148M | $78.1M | −$114M | $1.1B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 57.3× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $8.5B | |
| − Debt left | $1.1B | |
| = Buyer's equity | $7.3B | |
| Money multiple | 0.89× | on $8.2B put in |
| Buyer's yearly return (IRR) | −2.2% |
Price against return
What the buyer makes at other premiums over today's $31.89.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $35.08 | 1.7% |
| 20% | $38.27 | −0.3% |
| 30% | $41.46 | −2.2% |
| 40% | $44.65 | −3.9% |
| 50% | $47.84 | −5.4% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $2.9B | |
| EBITDA, last 12 months | $113M | 4.0% of revenue |
| Depreciation and amortization | $259M | |
| Capital spending | $132M | |
| Debt | $0 | |
| Cash | $707M | |
| Share price | $31.89 | on Oct 30, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 21% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Zillow Group would cost about $44.65 a share, $10.1B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 14.7% | $36.58 | $8.2B |
| Median | 40% | $44.65 | $10.1B |
| High end (a quarter paid more) | 60.2% | $51.09 | $11.5B |
The odds, from history
Historically 4.6% of companies with its figures were bought within a year (0.92× the average). Its figures put it in decile 5 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Zillow Group's latest quarter
Zillow Group, Q3 2026: revenue $724M (+7% year over year), operating margin -22.2%, net loss $158M, operating cash flow $162M. The chart follows the revenue to costs, profit and cash.
Questions
Is Zillow Group being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Zillow Group?
A leveraged buyout at today's price plus 30% ($41.46 a share) would return a loss of about 2% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%.
What would a takeover of Zillow Group cost?
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Zillow Group would cost about $44.65 a share, $10.1B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.