- Opendoor has reinvented how people buy and sell a home with its
simple, digital and on-demand experience
- The transaction will enable Opendoor to continue to invest in
growth, market expansion and new products that will accelerate
Opendoor’s plan to become a digital one-stop shop for
homeowners
- The transaction values Opendoor at an enterprise value of $4.8
billion, and is expected to provide up to $1.0 billion in cash
proceeds, including a fully committed PIPE of $600 million and up
to $414 million of cash held in the trust account of Social Capital
Hedosophia Holdings Corp. II (“SCH”)
- Insiders are making a significant commitment of $200 million of
the $600 million PIPE. This $200 million commitment includes $100
million from Chamath Palihapitiya, Founder and CEO of SCH, $58
million from Hedosophia, with the remainder invested by existing
Opendoor shareholders, Access Industries and Lennar, along with
Opendoor management
- Top-tier institutional investors anchoring the remaining $400
million of PIPE investments include funds and accounts managed by
BlackRock and Healthcare of Ontario Pension Plan (HOOPP)
- 100 percent of cash proceeds will be retained by Opendoor, with
existing shareholders of Opendoor rolling 100 percent of their
equity into the combined company
Opendoor Labs Inc. (“Opendoor” or the “Company”), the pioneer
and market leader in iBuying, has entered into a definitive
business combination agreement with Social Capital Hedosophia
Holdings Corp. II (NYSE: IPOB) ("SCH"), a publicly traded special
purpose acquisition company, to bring public a leading digital
platform for residential real estate.
Company Overview
Founded in 2014, Opendoor has reinvented the real estate
transaction, offering an on-demand, digital experience to buy and
sell a home. Opendoor enables homeowners to sell and buy online in
a few taps of a button, providing greater simplicity, certainty and
convenience than ever before. Since its founding, the Company has
served over 80,000 customers and sold over $10 billion of homes. In
2019, the company sold more than 18,000 homes, generating $4.7
billion in revenue.
Residential real estate remains the largest, undisrupted market
in the U.S. with $1.6 trillion in annual home sales and less than
one percent online penetration. For consumers, the current process
of buying or selling a home is complex, uncertain, time consuming
and offline. Opendoor, as the innovator and market leader in
iBuying, streamlines the transaction and brings the end-to-end
experience online. Homeowners can go online to request and accept
an offer, select their preferred closing date, sign and close. This
collapses the entire house selling process into a few simple steps
and removes up to 100 days of hassle and uncertainty. Home buyers
can download the Opendoor app, tour and visit homes instantly with
self-tours, get financing at competitive rates, and make an offer,
all with just a mobile device. Collectively, Opendoor has built a
simple, elegant, on-demand buying and selling experience.
The shift from offline to online consumption continues to
accelerate, driving increased customer awareness, adoption and
growth. Consumers are prioritizing safety, demanding digital
experiences, moving out of dense areas and searching for more space
to work from home. These trends create significant tailwinds for
Opendoor, whose mission is to empower people with the freedom to
move.
Opendoor currently operates in 21 markets across the U.S.,
including cities such as Phoenix, Dallas-Fort Worth,
Raleigh-Durham, Atlanta and Orlando. Given the demand for a digital
way to buy and sell a home and the much needed digitization of
services around the home, Opendoor plans to grow market share in
existing markets, expand to new markets and launch new products
that make real estate transactions even more seamless.
The Company’s management team, led by Founder and CEO Eric Wu,
will continue to lead Opendoor. SCH’s Director, Adam Bain (former
Chief Operating Officer of Twitter), will join the merged company’s
Board of Directors upon completion of the transaction.
Management Comments
Eric Wu, Founder and CEO of Opendoor, said:
“We founded Opendoor to make it simple and instant to buy and
sell a home, to delight customers and make their lives less
stressful, and to build an iconic, once in a generation company.
This is one of many milestones towards our mission and will help us
accelerate the path towards building the digital one-stop-shop to
move. I am grateful for the continued support from my teammates and
shareholders and most thankful for the tens of thousands – and I
hope soon to be hundreds of thousands – of families, couples and
individuals that trust Opendoor with the largest financial decision
of their life. We are energized by the opportunity to make our
online, streamlined experience available to millions of homeowners
every day.”
Chamath Palihapitiya, Founder and CEO of Social Capital
Hedosophia II, said:
“We created the IPO 2.0 platform to identify and partner with
iconic technology companies with proven management teams and assist
in their transition to the public markets. Opendoor perfectly
embodies this vision. The Company is transforming the $1.6 trillion
residential real estate market by combining a superior user
experience, streamlined operations and machine learning to create a
seamless digital experience. We are excited to work with Eric and
the supremely talented Opendoor team to unlock home ownership for
millions of Americans.”
Transaction Overview
On September 15, 2020, SCH (NYSE: IPOB.U) entered into a
definitive agreement to combine with Opendoor through a combination
of stock and cash financing. The business combination values
Opendoor at an enterprise value of $4.8 billion, representing 1.0x
2019 revenue.
The transaction is expected to deliver up to $1.0 billion of
gross proceeds, including the contribution of up to $414 million of
cash held in SCH’s trust account from its initial public offering
in April 2020. The transaction is further supported by a $600
million PIPE at $10.00 per share, with $200 million from entities
affiliated with SCH, including $100 million from Chamath
Palihapitiya, Founder and CEO of SCH, $58 million from Hedosophia,
and the remainder from existing Opendoor shareholders, Access
Industries and Lennar, along with Opendoor management. New
investors to Opendoor via additional PIPE contributions include
funds and accounts managed by BlackRock and Healthcare of Ontario
Pension Plan (HOOPP). Existing Opendoor shareholders have agreed to
roll 100 percent of their equity into the new company. Upon
completion of the transaction, Opendoor expects to have up to $1.5
billion in cash on its balance sheet to fund operations and support
new and existing growth initiatives. All references to cash on the
balance sheet, available cash from the trust account and retained
transaction proceeds are subject to any redemptions by the public
shareholders of SCH and payment of transaction expenses.
The transaction, which has been unanimously approved by the
Boards of Directors of Opendoor and SCH, is subject to approval by
SCH's shareholders and other customary closing conditions.
Additional information about the proposed transaction, including
a copy of the merger agreement and investor presentation, will be
provided in a Current Report on Form 8-K to be filed by SCH today
with the Securities and Exchange Commission (“SEC”) and available
at www.sec.gov.
Conference Call Information
Opendoor and SCH will host a joint investor conference call to
discuss the proposed transaction and review an investor
presentation today, Tuesday, September 15, 2020 at 4:00 p.m.
ET.
To listen to the prepared remarks via audio webcast, go to
Opendoor's investor website, at
https://opendoor.com/w/investors.
Investor Presentation
A link to the Company's investor presentation can be found on
Opendoor’s investor website, at
https://opendoor.com/w/investors.
Advisors
Connaught acted as financial advisor, Credit Suisse acted as
capital markets advisor and placement agent and Skadden, Arps,
Slate, Meagher & Flom LLP acted as legal advisor to SCH. Citi
acted as financial advisor and Latham & Watkins LLP acted as
legal advisor to Opendoor.
About Social Capital Hedosophia II
Social Capital Hedosophia II is a partnership between the
investment firms of Social Capital and Hedosophia. Social Capital
Hedosophia II unites technologists, entrepreneurs and
technology-oriented investors around a shared vision of identifying
and investing in innovative and agile technology companies. To
learn more about Social Capital Hedosophia, visit
www.socialcapitalhedosophiaholdings.com.
About Opendoor
Opendoor’s mission is to empower everyone with the freedom to
move. Since 2014, Opendoor has provided people across the U.S. with
a radically simple way to buy, sell or trade-in a home. Opendoor
currently operates in 21 markets in the U.S. and is headquartered
in San Francisco.
For more information, please visit www.opendoor.com.
Additional Information and Where to Find It
This press release relates to a proposed transaction between
Opendoor and SCH. This press release does not constitute an offer
to sell or exchange, or the solicitation of an offer to buy or
exchange, any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, sale or exchange would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. SCH intends to file a
registration statement on Form S-4 with the SEC, which will include
a document that serves as a prospectus and proxy statement of SCH,
referred to as a proxy statement/prospectus. A proxy
statement/prospectus will be sent to all SCH shareholders. SCH also
will file other documents regarding the proposed transaction with
the SEC. Before making any voting decision, investors and security
holders of SCH are urged to read the registration statement, the
proxy statement/prospectus and all other relevant documents filed
or that will be filed with the SEC in connection with the proposed
transaction as they become available because they will contain
important information about the proposed transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC by SCH through the website maintained by
the SEC at www.sec.gov.
The documents filed by SCH with the SEC also may be obtained
free of charge at SCH's website at
http://www.socialcapitalhedosophiaholdings.com/docsb.html or upon
written request to 317 University Ave, Suite 200, Palo Alto,
California 94301.
Participants in Solicitation
SCH and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from SCH's shareholders
in connection with the proposed transaction. A list of the names of
such directors and executive officers and information regarding
their interests in the business combination will be contained in
the proxy statement/prospectus when available. You may obtain free
copies of these documents as described in the preceding
paragraph.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws with respect to
the proposed transaction between Opendoor and SCH, including
statements regarding the anticipated benefits of the transaction,
the anticipated timing of the transaction, future financial
condition and performance of Opendoor and expected financial
impacts of the transaction (including future revenue, pro forma
enterprise value and cash balance), the satisfaction of closing
conditions to the transaction, the PIPE transaction, the level of
redemptions of SCH’s public shareholders and the products and
markets and expected future performance and market opportunities of
Opendoor. These forward-looking statements generally are identified
by the words "believe," "project," "expect," "anticipate,"
"estimate," "intend," "strategy," "future," "opportunity," "plan,"
"may," "should," "will," "would," "will be," "will continue," "will
likely result," and similar expressions. Forward-looking statements
are predictions, projections and other statements about future
events that are based on current expectations and assumptions and,
as a result, are subject to risks and uncertainties. Many factors
could cause actual future events to differ materially from the
forward-looking statements in this press release, including but not
limited to: (i) the risk that the transaction may not be completed
in a timely manner or at all, which may adversely affect the price
of SCH's securities, (ii) the risk that the transaction may not be
completed by SCH's business combination deadline and the potential
failure to obtain an extension of the business combination deadline
if sought by SCH, (iii) the failure to satisfy the conditions to
the consummation of the transaction, including the approval of the
merger agreement by the shareholders of SCH, the satisfaction of
the minimum trust account amount following any redemptions by SCH's
public shareholders and the receipt of certain governmental and
regulatory approvals, (iv) the lack of a third party valuation in
determining whether or not to pursue the proposed transaction, (v)
the inability to complete the PIPE transaction, (vi) the occurrence
of any event, change or other circumstance that could give rise to
the termination of the merger agreement, (vii) the effect of the
announcement or pendency of the transaction on Opendoor's business
relationships, operating results, and business generally, (viii)
risks that the proposed transaction disrupts current plans and
operations of Opendoor, (ix) the outcome of any legal proceedings
that may be instituted against Opendoor or against SCH related to
the merger agreement or the proposed transaction, (x) the ability
to maintain the listing of SCH's securities on a national
securities exchange, (xi) changes in the competitive and regulated
industries in which Opendoor operates, variations in operating
performance across competitors, changes in laws and regulations
affecting Opendoor's business and changes in the combined capital
structure, (xii) the ability to implement business plans,
forecasts, and other expectations after the completion of the
proposed transaction, and identify and realize additional
opportunities, (xiii) the risk of downturns and a changing
regulatory landscape in the highly competitive residential real
estate industry, and (ix) costs related to the transaction and the
failure to realize anticipated benefits of the transaction or to
realize estimated pro forma results and underlying assumptions,
including with respect to estimated shareholder redemptions. The
foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and
uncertainties described in the "Risk Factors" section of the
registration statement on Form S-4 discussed above and other
documents filed by SCH from time to time with the SEC. These
filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Opendoor and SCH assume no obligation and do not
intend to update or revise these forward-looking statements,
whether as a result of new information, future events, or
otherwise. Neither Opendoor nor SCH gives any assurance that either
Opendoor or SCH, or the combined company, will achieve its
expectations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200915005665/en/
Opendoor
Investors: Whitney Kukulka The Blueshirt Group
investors@opendoor.com
Media: Sheila Tran / Charles Stewart Opendoor
press@opendoor.com
Social Capital Hedosophia II
Media: Sara Evans / Kerry Golds Finsbury
sara.evans@finsbury.com / kerry.golds@finsbury.com +1.917.344.9279
/ +1.646.957.2279
Jonathan Gasthalter / Carissa Felger Gasthalter & Co.
SCH@gasthalter.com
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