CoStar Group expects to invest in Rent.com and
ApartmentGuide.com to preserve and grow leads for RentPath’s 28,000
clients
CoStar Management to Hold Conference Call at
8:00 AM Wednesday February 12 to Discuss
CoStar Group, Inc. (NASDAQ: CSGP) the leading provider of
commercial real estate information, analytics and online
marketplaces, announced today that it has signed an agreement to
acquire RentPath’s business for $588 million in cash, in connection
with RentPath’s recently announced Chapter 11 bankruptcy
process.
RentPath’s primary service is digital marketing for rental
properties through a network of Internet listing websites,
including Rent.com, ApartmentGuide.com, Rentals.com and Lovely.com.
The RentPath network of websites generated over 21 million monthly
visits and almost 9 million monthly unique visitors in 2019,
according to comScore, and had approximately 28,000 properties
advertised on its network as of December, 2019. RentPath is
headquartered in Atlanta, Georgia and has approximately 770
employees.
“RentPath has a 30-year track record of outstanding service to
the multifamily industry, developing thousands of meaningful
customer relationships,” said Andrew C. Florance, Founder and Chief
Executive Officer of CoStar Group. “Obviously, it is very
challenging for newspapers, magazines, and print directories to
reinvent themselves as profitable digital businesses. RentPath was
burdened with a heavy debt load that prevented the company from
making the necessary investments in building brand recognition and
generating traffic from Google. As the cost of Google traffic
soared, RentPath was unable to keep pace. Following restructuring
in bankruptcy, CoStar Group expects the combined companies to
benefit from synergies and plans to invest in building RentPath’s
online brands and traffic to provide improved quantity and quality
of lead flow to advertising clients. The Apartments.com network of
sites generated 842 million visits last year, and we intend to use
this valuable audience to generate leads for RentPath clients as
well.”
“We believe there is untapped potential to serve the millions of
landlords traditionally overlooked by online apartment
marketplaces, which tend to focus on large apartment communities
with over 100 units. We believe that investing in an excellent URL
like Rent.com is the perfect vehicle for reaching that underserved
audience.”
“CoStar Group operates a number of large and growing online
marketplaces,” continued Florance. “We believe that RentPath’s
talented and experienced employees will become valuable
contributors not only to our Apartments.com network of sites but
across all of our marketplaces.”
RentPath’s 2019 unaudited financials reflect revenue of
approximately $227 million and adjusted EBITDA of approximately $47
million. Total revenue declined approximately 9% from 2018, while
adjusted EBITDA declined approximately 24% in the same period.
“Following successful conclusion of the bankruptcy process and
regulatory review, we expect the acquisition to add scale to our
Apartments.com business and be highly accretive to CoStar earnings
once fully integrated,” said CoStar Group Chief Financial Officer
Scott Wheeler.
“We are very excited to be joining CoStar as part of the
Apartments.com network,” said Marc Lefar, Chief Executive Officer
of RentPath. “Our customers have an ever increasing number of
choices when considering where to spend their marketing dollars.
With CoStar’s commitment to invest in the RentPath family of sites,
we will be in a position to offer our customers the best options to
reach potential renters.”
The Company plans to provide revenue and earnings guidance for
2020 in its quarterly financial results release for the fourth
quarter expected to be issued on February 25, 2020. Revenue and
earnings guidance related to the transaction is not expected to be
available until later in the year.
The closing of the transaction is subject to various conditions,
including approval by the bankruptcy court and regulatory approval.
Subject to bankruptcy court oversight and pending closing, we
expect that RentPath’s operations will continue in the ordinary
course.
The preceding forward-looking statements reflect CoStar Group's
expectations as of February 11, 2020. We are not able to forecast
with certainty whether or when certain events, such as
acquisition-related costs, the exact timing of closing of the
acquisition, or the exact amounts or timing of any investments
related to the acquisition will occur. Given the risk factors,
uncertainties and assumptions discussed above, actual results may
differ materially. Other than in publicly available statements, the
Company does not intend to update its forward-looking statements
until its next quarterly results announcement.
Conference Call
Management will conduct a conference call at 8:00am EST on
February 12, 2020 to discuss the acquisition. The audio portion of
the conference call will be broadcast live over the Internet at
www.costargroup.com/investors/events. To join the conference call
by telephone, please dial 844-721-7241 (from the United States and
Canada) or 409-207-6955 (from all other countries) and conference
code 9109916 if needed. An audio recording of the conference call
will be available for replay approximately one hour after the
call's completion and will remain available for a period of time
following the call. To access the recorded conference call, please
dial 866-207-1041 (from the U.S. and Canada) or 402-970-0847 (from
all other countries) using access code 8752015. The webcast replay
will also be available in the Investors section of CoStar Group's
website for a period of time following the call.
About CoStar Group, Inc.
CoStar Group, Inc. (NASDAQ: CSGP) is the leading provider of
commercial real estate information, analytics and online
marketplaces. Founded in 1987, CoStar conducts expansive, ongoing
research to produce and maintain the largest and most comprehensive
database of commercial real estate information. Our suite of online
services enables clients to analyze, interpret and gain unmatched
insight on commercial property values, market conditions and
current availabilities. STR provides premium data benchmarking,
analytics and marketplace insights for the global hospitality
sector. LoopNet is the most heavily trafficked commercial real
estate marketplace online with over 6 million monthly unique
visitors. Realla is the UK’s most comprehensive commercial property
digital marketplace. Apartments.com, ApartmentFinder.com,
ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com,
AFTER55.com, CorporateHousing.com, ForRentUniversity.com and
Apartamentos.com form the premier online apartment resource for
renters seeking great apartment homes and provide property managers
and owners a proven platform for marketing their properties. CoStar
Group’s websites attracted an average of over 51 million unique
monthly visitors in aggregate in the third quarter of 2019.
Headquartered in Washington, DC, CoStar maintains offices
throughout the U.S. and in Europe and Canada with a staff of over
4,300 worldwide, including the industry’s largest professional
research organization. For more information, visit
CoStarGroup.com.
This news release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to, statements
about CoStar Group's financial expectations, the Company's plans,
objectives, expectations and intentions and other statements
including words such as “hope,” "anticipate," "may," "believe,"
"expect," "intend," "will," "should," "plan," "estimate,"
"predict," "continue" and "potential" or the negative of these
terms or other comparable terminology. Such statements are based
upon the current beliefs and expectations of management of CoStar
Group and are subject to significant risks and uncertainties.
Actual results may differ materially from the results anticipated
in the forward-looking statements. The following factors, among
others, could cause or contribute to such differences: the
possibility that the acquisition of RentPath does not close when
expected or at all; the possibility that the parties are unable to
obtain bankruptcy court or regulatory approval; the risk that the
businesses of RentPath and Apartments.com may not be combined
successfully or in a timely and cost-efficient manner; the risk
that the combination does not produce the expected benefits for
RentPath and CoStar or their customers and consumers as stated in
this release; the risk that business disruption relating to the
RentPath acquisition may be greater than expected; the risk that
the bankruptcy process may cause greater business disruption for
RentPath than currently expected and may cause RentPath to change
the way it operates its business and that it may be unable to
operate in the ordinary course pending closing; the risk that
synergies from the acquisition of RentPath may not be as expected,
may not be fully realized, or may take longer to realize than
expected; the risk that the acquisition does not produce the
expected results for CoStar, Apartments.com and RentPath or their
advertisers and consumers, including increased scale of our
Apartments.com business, the acquisition being highly accretive
once integrated, and as otherwise stated in this release; the risk
that expected investments in RentPath, or the timing of any such
investments, may change or may not produce the expected results as
stated in this release; the risk that revenue results will differ
from expectations; and the risk that the combination and
integration of RentPath will disrupt CoStar Group's,
Apartments.com’s or RentPath’s operations or result in the loss of
customers or key employees. Additional factors that could cause
results to differ materially from those anticipated in the
forward-looking statements can be found in CoStar’s Annual Report
on Form 10-K for the year ended December 31, 2018, and CoStar’s
Quarterly Report on Form 10-Q for the quarter ended September 30,
2019, each of which is filed with the SEC, including in the “Risk
Factors” section of those filings, as well as CoStar’s other
filings with the SEC available at the SEC’s website (www.sec.gov).
All forward-looking statements are based on information available
to CoStar on the date hereof, and CoStar assumes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200211006128/en/
Investor Contacts
Scott Wheeler Chief Financial Officer (202) 336-6920,
swheeler@costar.com
Sarah Spray Investor Relations (202) 346 6394,
sspray@costar.com
CoStar (NASDAQ:CSGP)
Historical Stock Chart
From Mar 2024 to Apr 2024
CoStar (NASDAQ:CSGP)
Historical Stock Chart
From Apr 2023 to Apr 2024