Company plans to combine Homes.com and Homesnap
to offer the best online home buying experience possible by
frictionlessly connecting agents, buyers, and sellers
CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of
commercial real estate information, analytics and online
marketplaces, announced today that it has completed the acquisition
of Homes.com, previously announced on April 14, 2021, for $156
million in cash. The Federal Trade Commission cleared the
transaction to close last week.
“The combination of Homes.com and Homesnap, which we acquired in
December 2020, sets the stage for us to offer sellers, buyers, and
real estate agents a better, more collaborative online home sale
and purchase experience,” said Andrew C. Florance, Founder and
Chief Executive Officer of CoStar Group. “Rather than building a
business model based on creating friction to syphon off agent
commissions, we plan to provide a next generation marketplace that
connects listing and buyer agents to sellers and buyers without
taking a cut of their commissions. We strongly believe that
consumers are better served when they are matched to an agent for
free, based upon the agent’s expertise, rather than based upon how
much a random agent is willing to pay for a lead. Real estate
agents are central to 90 percent of home sales. We respect that and
want to help them strengthen their relationships with their
clients, rather than trying to disrupt and monetize those
relationships. It is time for just such an offering, and we believe
we are uniquely positioned to provide it.”
With CoStar Group’s commitment to the principle that the leads
generated by an agent’s listings belong to that agent, CoStar Group
intends to discontinue Homes.com products and practices that are
inconsistent with this principle.
CoStar Group has a track record of growing sector-leading site
traffic with its online marketplaces such as Apartments.com,
LoopNet, and many others. CoStar Group’s marketplaces generated
more than one billion visits last year. With the acquisition of
Homes.com, CoStar Group plans to similarly grow Homes.com site
traffic by offering home buyers accurate, real-time information
straight from the local MLS, supported by the best photography and
multimedia content possible, all in a website that empowers
homebuyers to collaborate with the agents they trust. CoStar
Group’s hundreds of talented architectural photographers have
brought millions of properties alive for millions of renters and
buyers with the highest quality photographs, videos, aerial
imagery, and 3D tours. Now this team is committed to providing an
immersive and compelling presentation of residential properties on
Homes.com.
Homesnap is the leading real estate productivity and marketing
app and hundreds of thousands of the most productive real estate
agents in the country rely on it to manage their businesses. CoStar
Group intends to fully integrate Homesnap and Homes.com, with
Homesnap at one end as the agent’s professional tool and Homes.com
on the other side as the home buyer’s portal. Once integrated,
agents will have instant access to manage their listings on
Homes.com, view and respond to inquiries, collaborate with clients,
and provision and monitor sophisticated digital marketing
campaigns. We believe this direct connection between agents and a
consumer portal is unique in the industry.
Homes.com has one of the largest real estate portal sales forces
and CoStar Group intends to leverage that sales force to sell the
Homesnap product with the goal of expanding Homesnap’s reach to
hundreds of thousands of additional real estate agents.
CoStar Group expects Homes.com
to contribute approximately $10 million in incremental revenue and
approximately $15 million in negative adjusted EBITDA in 2021,
which includes the negative impact of the planned business model
transition on existing Homes.com product revenue.
Non-GAAP Financial Measures
For information regarding the purpose for which management uses
the non-GAAP financial measures disclosed in this release and why
management believes they provide useful information to investors
regarding the Company’s financial condition and results of
operations, please refer to the Company’s latest periodic
report.
EBITDA is a non-GAAP financial measure that represents GAAP net
income before (i) interest income (expense), (ii) provision for
income taxes, and (iii) depreciation and amortization.
Adjusted EBITDA is a non-GAAP
financial measure that represents EBITDA before (i) stock-based
compensation expense, (ii) acquisition and integration related
costs, (iii) restructuring charges and related costs, and (iv)
settlements and impairments incurred outside the company’s normal
business operations.
About CoStar Group
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. Ten-X provides a leading platform for conducting commercial
real estate online auctions and negotiated bids. LoopNet is the
most heavily trafficked commercial real estate marketplace online.
Realla is the UK’s most comprehensive commercial property digital
marketplace. Apartments.com, ApartmentFinder.com, ForRent.com,
ApartmentHomeLiving.com, Westside Rentals, 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. Homesnap is an
industry-leading online and mobile software platform that provides
user-friendly applications to optimize residential real estate
agent workflow and reinforce the agent-client relationship.
Homes.com offers real estate professionals brand and property
advertising that connect consumers with real estate professionals.
CoStar Group’s websites attract tens of millions of unique monthly
visitors. Headquartered in Washington, DC, CoStar maintains offices
throughout the U.S. and in Europe, Canada and Asia with a staff of
over 4,600 worldwide, including the industry’s largest professional
research organization. For more information, visit
www.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 plans, objectives, expectations, beliefs 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 many risks and
uncertainties. Actual results may differ materially from the
results anticipated in the forward-looking statements and the
assumptions and estimates used as a basis for the forward-looking
statements. The following factors, among others, could cause or
contribute to such differences: the risk that the businesses of
Homes.com, Homesnap and CoStar may not be combined successfully or
in a timely and cost-efficient manner; the risk that the
integration of Homes.com and Homesnap will not produce the new
services as and when expected; the risk that the combination and
integration of Homes.com and Homesnap will disrupt CoStar Group’s
operations or result in the loss of customers or key employees; the
risk that business disruption relating to the Homes.com acquisition
may be greater than expected; the risk that the acquisition does
not produce the expected benefits or results for CoStar, Homes.com
or their customers and agents, including the features and content
discussed in this release and increased site traffic for Homes.com;
the risk that CoStar’s business plans may change with respect to
Homes.com and Homesnap; the risk that transitioning the Homes.com
business model results in the loss of customers, brokers, and
agents; the risk that the impact of the planned business model
transition on current product revenue differs from current
expectations and as stated in this release; the risk that Homes.com
incremental revenues and negative adjusted EBITDA for the remainder
of 2021 will not be as stated in this press release; uncertainty
surrounding the impact of the COVID-19 pandemic, including
volatility in the international and U.S. economy, worker
absenteeism or decreased productivity, quarantines or other travel
or health-related restrictions; the length and severity of the
COVID-19 pandemic; the pace of recovery following the COVID-19
pandemic; and government and private actions taken to control the
spread of COVID-19. Additional factors that could cause results to
differ materially from those anticipated in the forward-looking
statements include, but are not limited to, those stated in CoStar
Group’s filings from time to time with the Securities and Exchange
Commission, including in CoStar Group’s Annual Report on Form 10-K
for the year ended December 31, 2020 and Quarterly Report on Form
10-Q for the quarter ended March 31, 2021, each of which is filed
with the SEC, including in the “Risk Factors” section of that
filing, as well as CoStar Group’s other filings with the SEC
(including Current Reports on Form 8-K) available at the SEC’s
website (www.sec.gov). All forward-looking statements are based on
information available to CoStar Group on the date hereof, and
CoStar Group 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/20210524005501/en/
Investor Relations: Bill Warmington Vice President CoStar
Group Investor Relations (202) 346-5661 wwarmington@costar.com
News Media: Matthew Blocher Vice President CoStar Group
Corporate Marketing & Communications (202) 346-6775
mblocher@costargroup.com
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