Redfin to buy RentPath for $608M
FTC blocked CoStar’s attempted purchase last year for $585M
Making a major push into the rental market, Redfin has struck a deal to buy RentPath for $608 million, the brokerage said Friday.
The deal, which is subject to regulatory approval, comes less than three months after RentPath called off its $588 million sale to commercial real estate giant CoStar. Federal regulators sued to block that deal on antitrust grounds.
Seattle-based Redfin said RentPath’s growing web traffic would broaden its offerings and drive traffic to its site. RentPath owns Rent.com, Rentals.com and ApartmentGuide.com, which claim 16 million monthly viewers combined.
“Together with RentPath, we can create an online destination for every North American to find a home,” Redfin CEO Glenn Kelman said in a statement, citing one-third of American households that rent.
During an investor call Friday, Kelman said the logic of the deal was entirely based on combining the two company’s audiences. Redfin had 39 million average monthly visitors in 2020. “The websites that are ahead of us as real estate destinations have rentals,” he said. “We don’t. The only way to climb that mountain is by building that inventory.”
For Atlanta-based RentPath, the deal caps a tumultuous year, starting with its Chapter 11 bankruptcy filing in February 2020. After striking a deal with CoStar, the Federal Trade Commission sued to block the sale in November. The following month, RentPath pulled out of the agreement, prompting a standoff between the two companies over a $60 million break-up fee.
During an investor call Friday, Kelman said Redfin is in a different position than CoStar, which operates Apartments.com, ApartmentFinder.com and ForRent.com. “We represent a new alternative for property management companies to get better value,” he said. “So we’d expect the government to welcome that.”
During the call, Redfin said it would not assume RentPath’s liabilities.
RentPath generated $194 million in 2020 revenue, the company said. Redfin reported $875 million in revenue for the 12 months ending Sept. 30, 2020. Redfin will release fourth quarter earnings next week.