Compass, its coffers swollen by the housing boom, shows few signs of slowing its shopping spree.
The brokerage said Tuesday that it will buy Dallas-based LegacyTexas Title, expanding its title insurance and escrow business in the nation’s second-most populous state. Compass didn’t disclose terms of the deal, which is expected to close by the end of the year pending Texas regulatory approval. It entered the title and escrow business in October 2020, when it acquired startup Modus in October 2020.
The purchase brings to seven the number of states where New York-based Compass offers title and escrow services, including California, Florida, Washington, Maryland and Virginia. Compass spent $103.8 million in the first half of 2021 to buy four brokerages, Washington D.C.-based title and escrow company KVS Title and Glide Labs, a transaction management platform, public filings show. It also launched in 15 new markets in the second quarter and announced a mortgage joint venture with Guaranteed Rate.
Compass CEO Robert Reffkin told analysts on the second-quarter earnings call that the pace of acquisitions would probably slow in the second half of the 2021 and that costs associated with them will be reported in coming months. Reffkin and CFO Kristen Ankerbrandt, spent a large portion of the call explaining how the company will become profitable and why the brokerage is, in fact, a technology company.
Compass has plenty of company when it comes to investing cash in new lines of business. Douglas Elliman’s parent company is pouring surplus cash into a venture capital investment arm. EXp World Holdings announced its first cash dividend, a mortgage venture and has extended its business to Israel, Spain, Columbia and Panama. Realogy, meantime, is repaying corporate debt and planning to plough cash into its iBuying program.