CoStar Group to Acquire Residential Listing Site Homes.com
Homes.com provides advertising and marketing services to residential brokers and agents based on listing feeds that cover more than 90% of all Multiple Listing Services (MLS) subscribers in the United States.
CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces, announced today that it has reached a definitive agreement to acquire Homes.com, a division of Dominion Enterprises, for $156 million in cash.
Homes.com is a well-recognized residential property listing and marketing portal that supports over 500,000 residential agents and brokers in the home sale process. Approximately 5 million people visit the Homes.com website each month to search nearly 1.8 million residential property listings. Homes.com provides advertising and marketing services to residential brokers and agents based on listing feeds that cover more than 90% of all Multiple Listing Services (MLS) subscribers in the United States. The company is headquartered in Norfolk, Virginia.
“We are excited to welcome the Homes.com team to the CoStar family,” said Andrew C. Florance, Founder and Chief Executive Officer of CoStar Group. “We believe that the acquisition of Homes.com is highly complementary alongside Homesnap, the industry-leading workflow and marketing platform for residential real estate agents that we acquired in December last year. The combination of Homes.com’s online portal and consumer traffic with Homesnap’s powerful mobile tools and highly effective agent marketing solutions has the potential to create a differentiated service that uniquely focuses on selling a house faster and at a better price, rather than just trying to take agent fees.”
“Unfortunately,” continued Florance, “current residential listing sites do not serve the interests of homeowners or their agents as they focus on selling advertisements on top of agent listings and increasingly offer competing brokerage services. These sites generate a portion of their revenue from directing potential homebuyers away from the listing agents to unrelated buyer agents that are advertising on top of listing agent listings. This is a practice we plan to no longer continue. Our plan in bringing Homesnap and Homes.com together is to help agents market their listings in support of the ‘your listing, your lead’ philosophy – which stands in contrast to most players in the industry.”
“The Homes.com team and I are looking forward to working with our new colleagues at CoStar,” said Dave Mele, President of Homes.com. “Together we will be dedicated to growing the Homes.com brand and building innovative solutions that expand the marketing options available to consumers and their agents.”
The transaction is expected to close in the first half of 2021, subject to customary closing conditions and regulatory review. We anticipate the acquisition of Homes.com will contribute approximately $5-10 million in incremental revenue to CoStar Group in the second half of 2021, subject to transaction timing. CoStar Group plans to provide additional information about the Homes.com acquisition during the first quarter 2021 financial results conference call scheduled for April 27, 2021.
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. 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
About Homes.com
Homes.com connects consumers with real estate professionals through a simply smarter home search experience. With more than 25 years of experience serving the real estate industry, Homes.com offers real estate professionals brand and property advertising, search engine marketing, and instant response lead generation to help them succeed online. For more information, visit Homes.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 possibility that the acquisition of Homes.com does not close when expected or at all; the possibility that the parties are unable to obtain regulatory approval, or the risk that any actions required to be taken in order to receive regulatory approval may impact the expected benefits of the transaction; 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 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, agents and brokers, including growing the Homes.com brand expanding the marketing options available to consumers and their agents and as otherwise stated in this release; the risk that CoStar’s business plans may change; the risk that discontinuing certain Homes.com practices results in the loss of customers, brokers, agents and revenue; the risk that Homes.com revenues for the second half of 2021 will not be as stated in this press release; the risk that the combination and integration of Homes.com will disrupt CoStar Group's or Homes.com’s operations or result in the loss of customers or key employees; 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, 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.
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