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Compass denies private-equity takeover talks
"There have been no talks with private equity firms on this matter," brokerage says of Insider report
Compass on Wednesday denied a report in Insider that claimed the brokerage was being eyed for a takeover by private equity firm Vista Equity Partners.
“Compass has not been contacted by any private equity firms expressing interest in taking the company private,” a spokesperson for the firm told The Real Deal. “There have been no talks with private equity firms on this matter.”
Insider reported earlier Wednesday that Vista, founded by billionaire Robert F. Smith, was exploring taking Compass private, citing three anonymous sources. The publication reported that another private equity firm could also be involved in the transaction, as well as a proptech startup that could boost Compass’ digital chops.
But Compass took the unusual step of denying the report – public companies do not usually comment on takeover rumors – telling Insider that “no private equity firm has contacted Compass expressing any interest in taking the company private.”
Representatives for Insider couldn’t be reached for comment by press time.
Robert Reffkin, Compass co-founder and CEO, would have to approve any sale, given that he holds shares that give him about half the company’s voting power.
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Compass’ stock was up in after-hours trading following the publication of the report. The brokerage has suffered heavy losses over the past 18 months, totaling nearly $800 million, and its stock is down nearly 75 percent this year.
It went public in April 2021 with a market cap of nearly $7 billion, down to $1.1 billion today. It has recently moved to aggressively slash costs, engaging in layoffs across its tech, product, administrative and marketing teams, scaling back Compass Concierge, its home-improvement program for sellers, and ending equity grants for new agents. It aims to cut expenses by over $300 million this year.
In August, Vista announced it had struck an $8.4 billion deal to take tax software firm Avalara private. That followed a move in January to take cloud-computing Citrix private in a $16.5 billion deal.
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