Redfin is making a major push into the residential home rental market, announcing Friday morning that it is paying $608 million in cash for Atlanta-based RentPath. The deal, approved by the boards of both companies, will establish Redfin’s online rental marketplace, adding online destinations such as Rent.com, Rentals.com and ApartmentGuide.com that attract about 16 million monthly visitors.
When the deal closes, it will also add 700 employees to Redfin’s tally of 4,000 employees. RentPath posted revenue of $194 million last year, while Redfin saw revenue of $875 million for the trailing twelve months ended September 30, 2020.
Possible regulatory headwinds await. In December, RentPath terminated an agreement to be acquired by CoStar Group following a decision by the FTC to sue to block the deal based on potential harm to consumers due to consolidation in the residential rental market. That acquisition, originally announced in February 2020, valued RentPath at $588 million and came as the company entered Chapter 11 bankruptcy.
“RentPath has made significant progress and is on an upward trajectory despite an undoubtedly challenging 2020,” said Stephen Spencer, Managing Director at Houlihan Lokey and advisor to RentPath’s lenders in a press release at the time of the canceled CoStar deal. “The market for real estate technology businesses continues to be very strong as recent M&A transactions have highlighted.”
Redfin is best known for its home buying and selling services, but apartment rentals is an attractive slice of the home market that the Seattle company has not yet touched in a big way.
“RentPath has more than 20,000 apartment buildings on its rental websites, and grew its traffic more than 25% last year,” said Redfin CEO Glenn Kelman in a statement. “We can almost double that audience, as one in five of Redfin.com’s 40+ million monthly visitors also wants to see homes for rent. Together with RentPath, we can create an online destination for every North American to find a home.”
The deal comes three days after Redfin’s cross-town rival Zillow made its own big purchase in the real estate market, buying home touring company ShowingTime for $500 million.
A Redfin conference call has been set for 5 a.m. pacific time on Friday to discuss particulars of the RentPath deal.
Developing story. More to come.
from GeekWire https://www.geekwire.com/2021/redfin-agrees-acquire-rentpath-608-million-owner-rentals-com-rent-com-apartmentguide/