The 5 Biggest Real Estate Portal Mergers and Acquisitions of 2022 (Plus 2 Near Misses)

December 28, 2022
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The last 12 months have seen a big slowdown in real estate markets around the world. Compared to some of the monumental deals that saw billions of dollars change hands and tied up markets in 2021, this year has been more muted on the M&A front.

 

Number Of Ma Articles On Omp 2022Regardless, there have still been plenty of interesting deal-related stories to tell and M&A remains the most popular news category on OnlineMarketplaces.com.

Barring any buzzer-beating breakthroughs in the last couple of days of the year, here are the most important mergers and acquisitions from the real estate marketplace industry in 2022...

 

 

Redfin Acquires Bay Equity Home Loans

The direction of travel for real estate marketplace companies in the United States is definitely towards being a one-stop transactions shop. Perhaps the trickiest piece of that puzzle is mortgages. Zillow's Mortgages segment (below) has consistently struggled to turn a profit despite the portal's trusted brand and enviable top-of-the-funnel position.

Zillow Mortgages Quarterly Revenue And Ebitda

The brokerage and marketplace company Redfin already had a small in-house mortgage operation when it splashed $135 million to acquire Bay Equity Home Loans in January. The dal saw Redfin 10x the value of the mortgages it was previously originating and add nearly 500 Mortgage Loan Originators to its payroll.

Redfin's mortgage acquisition has yet to prove itself. According to the company's latest quarterly results, the Mortgages segment generated $48 million in revenue and a $5 million net loss in Q3.

Redfin Mortgages Originated

 

Domain acquires Realbase

In April Australian #2 portal company Domain announced that it had agreed to acquire the campaign management platform market leader Realbase.

According to CEO Jason Pellegrino, the deal not only strengthened the market positioning of Domain's Agent Solutions software business (with market coverage reported to have increased from ∼35% to ∼50%) but also added to the value of the portal's core listings business.

The A$180 million Domain agreed to pay was in large part financed by the ASX-listed portal's long-term backer Nine Entertainment which took its shareholding above 60% with the deal. The deal also contained an earn-out consideration of A$50 million based on Realbase's financial performance.

The initial price for Realbase represented 8x yearly revenue and 20.5x EBITDA.

Domain Yearly Segment Revenue

Despite only contributing for two months Realbase contributed to a 67% revenue increase for the company's Agent Solutions segment for the year that ended 30th of June.

 

Quinto Andar acquires Vivanuncios

The fact that Adevinta was looking to offload its assets in Mexico was well-known in the industry prior to the deal announced in September to sell Vinanuncios and Segundamano to Quinto Andar subsidiary Navent.

While Segundamano is a true generalist classifieds site, Vivanuncios is the number two player in real estate despite having started life as a generalist platform.

Mexican Real Estate Portal Traffic

The deal spelt bad news for the country's number three portal Lamudi with Managing Director Jaume Molet Taking to social media to criticise the deal.

"Very bad news for the competitiveness of the real estate industry in Mexico and for the thousands of real estate professionals who will be affected." [translated from Spanish]

Although its management did not cite the deal to unite its two biggest rivals, the EMPG-owned portal ultimately laid off a substantial percentage of its staff (reported to be as many as 100) a month after the merger.

 

Prosus sells Avito

After coming under significant internal and external pressure, Prosus knew that it would have to sell off the leading Russian online classifieds site Avito. After the Dutch classifieds operator announced it was seeking a buyer in May, the only questions were who would it sell to and for how much.

In October they were answered as a deal was announced to sell the successful generalist site to Kismet Capital Group, a company founded by Ivan Tavrin former CEO of the MegaFon telecoms company and close ally of the Kremlin-linked oligarch Alisher Usmanov.

The price agreed upon was $2.5 billion and represented a substantial markdown from the $3.85 billion Avito was valued at in 2019 when Prosus paid $1.16 billion to top up its stakeholding to 99.6%.

The loss of Avito wiped around $700 million in revenue and $240 million in trading profit off Prosus' 2022 balance sheet.

Avito Revenue And Trading Profit

Despite effectively bringing Avito under the same control as its direct rival Youla.ru (owned by Usmanov's VK Group), the deal was waved through by the Russian Federal Antimonopoly Service. The same body had blocked Avito's pursuit of leading property vertical Cian 12 months earlier.

 

Adevinta sells Gumtree

Since the beginning of 2020, no other company has sold off more online classifieds assets than Schibsted spinoff Adevinta. The 'portfolio optimisation' has seen the company divest from assets in 11 countries.

Assets Sold By Adevinta Since 2020

The end of 2022 saw Adevinta sell off its Gumtree assets in Australia and South Africa. Outside of its core European markets, the company now only retains online classifieds assets in Canada (Adevinta has decided to keep its asset) and Hungary (where the review decision is expected soon). The great sell-off is almost finished.

Adevinta Segment Ebitda From 2018 To 2021

The deal to sell off its Australian assets was signed in August, concluded in October and brought in $60 million. In itself, the deal isn't particularly significant but in a broader context, it represents the shedding of (possibly) the final burden on Adevinta's portfolio.

Adevinta's new CEO Antoine Joteau and his management team now have few obstacles to maximise performance and few excuses for not pleasing a disgruntled set of shareholders who have seen the Nordic classifieds operator's shares stay well below their IPO price

 

Two deals that didn't happen but may surface again in 2023...

 

Carousell's deal to buy 99 Group

In July Bloomberg cited insiders in reporting that Southeast Asian real estate portal operator 99 Group had pulled out of takeover talks with generalist classifieds marketplace and e-commerce company Carousell.

The deal would have reportedly been worth $150 million and would have unified the operations of two of the region's strongest online classifieds players and presented a challenge to Sinapore-based PropertyGuru.

99 Group And Carousell Group Assets

Ultimately the deal between the two collapsed in July after Carousell's deal to go public collapsed two months earlier. Carousell Group had been in SPAC merger talks with private equity firm L Catterton with a valuation figure of $1.5 quoted in Bloomberg's reporting.

 

Scout24 being taken private

According to an April report from Dealreporter, several private equity firms including Hellman & Friedman, EQT and Permira had been in conversation with publicly listed German portal operator Scout24 about the possibility of a takeover worth a reported €6.3 billion.

The rumours saw Scout24's share price swell more than 15% on the 8th of April as one JP Morgan analyst was quoted as speculating that a takeover bid of €80 per share could be possible.

Ultimately any rumoured talk has yet to lead to anything and Scout24 remains a public entity.

Scout24 Quarterly Financials

This wasn't the first time that there has been chatter about a deal for the German market leader. In 2019 Scout24 rejected a deal worth $5.3 billion from Hellman & Friedman and Blackstone.

December 28, 2022
Edmund got to know the world of portals and marketplaces working at Mitula Group (which became Lifull Connect after the buyout in 2018). He worked directly with hundreds of portals across the world in his role in the content department for three and a half years before transferring to the SEO department to understand the inner workings of listings sites. He joined Online Marketplaces as Head of Content in March 2020.

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