Brookfield Real Estate Services Inc. Announces Acquisitions
December 21 2011 - 4:00PM
PR Newswire (Canada)
TORONTO, Dec. 21, 2011 /CNW/ - Brookfield Real Estate Services Inc.
(the "Company") announced today that it has approved the
acquisition from the Company Manager, Brookfield Real Estate
Services Limited ("the Manager") of franchise agreements
representing 17 real estate offices and 219 REALTORS(® )operating
under the Royal LePage brand across Canada and the Via Capitale
brand in the province of Quebec. The acquisitions are to be
effective January 1, 2012. "Our collective brands continue to enjoy
enviable reputations in the industry, attracting the best new
agents interested in superior business tools, technologies and
training to help them grow their practices. Our aim is to
continually evolve and enhance the client experience with
innovative services and products," said Phil Soper, President and
Chief Executive. "Looking ahead to 2012, we believe the momentum
from a strong market finish to the previous year, coupled with a
continued low-interest rate environment, will sustain a healthy
market for real estate brokerage services," added Soper.
Acquisition of Franchise Agreements Royal LePage Agreements Under
the Royal LePage brand, the Company will acquire franchise
agreements representing 12 real estate brokerage offices and 147
REALTORS(®) for approximately $1.9 million. These agreements
generated an estimated annual royalty stream of $0.3 million during
the past year. As outlined in the Company's MSA, 80% of the 2012
acquisition price will be paid in January 2012. The purchase price
will be finalized and the balance paid at the end of 2012, in
accordance with the Management Services Agreement ("MSA") between
the Company and the Manager. Via Capitale Agreements Under the Via
Capitale brand, the Company will acquire franchise agreements
representing five real estate brokerage offices and 72 REALTORS(®)
for approximately $1.0 million. These agreements generated an
estimated annual royalty stream of $0.2 million during the past
year. As agreed with the independent directors, 80% of the 2012
acquisition price is to be paid in January 2012. Under terms
negotiated with the Company's Directors, the balance of the
purchase price will be finalized over the next three years and is
to be paid in annual installments over the same period. Funding
Through Internal Cash The combined payment due January 1, 2012 of
approximately $2.6 million, which includes applicable taxes, will
be funded internally. About Brookfield Real Estate Services Inc.
The Company is a leading provider of services to residential real
estate brokers and their REALTORS®(1). The Company generates cash
flow from franchise royalties and service fees derived from a
national network of real estate brokers and agents in Canada
operating under the Royal LePage, Via Capitale Real Estate Network
and Johnston & Daniel brand names. At September 30, 2011, the
Company network consisted of 15,295 REALTORS®. The Company network
has an approximate 23% share of the Canadian residential resale
real estate market based on transactional dollar volume. The
Company generates both fixed and variable fee components. Variable
fees are primarily driven by the total transactional dollar volume
from the sales commissions of REALTORS®, while fixed fees are based
on the number of agents and sales representatives in the network.
Approximately 68% of the Company's revenue is based on fees that
are fixed in nature; this provides revenue stability and helps
insulate the Company's cash flows from market fluctuations. The
Company is listed on the TSX and trades under the symbol "BRE". For
further information about the Company, please visit
www.brookfieldresinc.com. Forward-Looking Statements This news
release contains forward-looking information and other
"forward-looking statements".The words such as "should", "will",
"continue", "plan", "believe", "expect", "anticipate", "intend",
"estimate" and other expressions which are predictions of or
indicate future events and trends and which do not relate to
historical matters identify forward-looking statements. Reliance
should not be placed on forward-looking statements because they
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of
the Company to differ materially from anticipated future results,
performance or achievement expressed or implied by such
forward-looking statements. Factors that could cause actual results
to differ materially from those set forward in the forward-looking
statements include a change in general economic conditions,
interest rates, consumer confidence, the level of residential
resale transactions, the average rate of commissions charged,
competition from other traditional real estate brokers or from
discount and/or internet-based real estate alternatives, the
availability of acquisition opportunities and/or the closing of
existing real estate offices, other developments in the residential
real estate brokerage industry or the Company that reduce the
number of and/or royalty revenue from the Company's REALTORS®, our
ability to maintain brand equity through the use of trademarks, the
availability of equity and debt financing, a change in tax
provisions, and other risks detailed in the Company's annual
information form which is filed with securities commissions and
posted on SEDAR at www.sedar.com. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law. (1 )REALTOR® is a
trademark identifying real estate licensees in Canada who are
members of the Canadian Real Estate Association. Brookfield Real
Estate Services Inc. CONTACT: Tammy GilmerDirector, Public
Relations & National CommunicationsBrookfield Real Estate
Services Inc.tgilmer@brookfieldres.comTel: 416.510.5783
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