RentPath calls off CoStar acquisition after FTC lawsuit
FTC sued in November to stop $588M deal
CoStar Group will no longer be acquiring RentPath Holdings, thanks to the FTC.
RentPath announced today that it terminated its agreement with CoStar, TechCrunch reported. In February, the two companies agreed to a deal in which CoStar would pay $588 million for the troubled listings platform.
But in November, the U.S. Federal Trade Commission sued to block the deal, citing antitrust laws. The merger would have given CoStar a significant advantage over its competitors in the residential listings space, the FTC claimed.
Despite filing for Chapter 11 bankruptcy in February, RentPath said in a statement Tuesday its traffic has grown in the second half of 2020 and it has the backing of “well-known” asset management firms.
“We have a range of high growth products that complement our core apartment search websites, and we are excited to emerge from restructuring and continue to build on this foundation,” RentPath CEO Dhiren Fonseca said in a statement.
RentPath owns Rent.com and ApartmentGuide.com, while CoStar operates Apartments.com, ApartmentFinder.com and ForRent.com. The FTC said that the proposed acquisition would further concentrate online listings for apartments in 49 major U.S. metro markets.
“[CoStar and RentPath’s] aggressive, head-to-head competition has kept advertising rates low while offering consumers a convenient, data-rich tool for finding an apartment,” FTC Bureau of Competition Deputy Director Daniel Francis said in a statement in November. “This acquisition will eliminate price and quality competition that benefits both renters and property managers.”
CoStar has been aggressively expanding its presence in the residential sector, shelling out around $2 billion since 2014 to acquire platforms like Apartments.com and ForRent.com. It also recently acquired HomeSnap, a residential sales platform, for $250 million.
[TechCrunch] — Sasha Jones