CoStar Group is in talks to acquire a troubled apartment listing firm for close to $500 million.
The discussions to acquire RentPath — the parent company of residential rental websites including ApartmentGuide.com, Rentals.com and Rent.com — remain in flux, and a deal is yet to close, according to the Wall Street Journal.
The deal would further signal CoStar’s desire to gobble up apartment-listings businesses to complement its sprawling commercial real estate information service.
CoStar has had a steady run of acquisitions in the sector that started in 2014 when it acquired Apartments.com for $585 million, a bet that has paid off well and continues to boost its revenue. In October, it paid $450 million cash to acquire STR, a Tennessee-based data firm that provides supply and demand insights on the hospitality industry.
The acquisition of RentPath could also raise eyebrows about CoStar’s grip on the real estate data market. In October, Moody’s Investors Service downgraded RentPath’s credit rating, citing “competitive pressure by a substantially larger and better capitalized competitor.” At the time, CoStar’s Aparments.com had twice as many web visitors than RentPath’s sites.
TPG Capital reportedly acquired RentPath in 2011 from KKR for $525 million, and Providence Equity later acquired a 50 percent stake in the firm. As RentPath has faced financial trouble alongside increased competition, its owners tapped financial advisors to restructure $650 million of debt, the Journal reported.
CoStar, which is due to release its 2019 earnings this month, last year was on target to generate almost $1.4 billion in revenue, up from $1.2 billion the year before. [WSJ] — David Jeans