CoStar Group, Inc./LoopNet, Inc.

On April 27, 2011, CoStar Group, Inc. (Nasdaq: CSGP) has entered into a definitive agreement to acquire LoopNet, Inc. (Nasdaq: LOOP) for $16.50 in cash and 0.03702 shares of CoStar Group common stock for each share of LoopNet common stock, representing a total equity value of approximately $860 million and an enterprise value of $762 million.

Closing is expected by the end of CY11.

• CoStar sees the potential for significant revenue synergies through the cross-selling of each company's complementary services to the other's client bases
  
  
• CoStar expects annual cost synergies of approximately $20 million achieved over the first 24 months following the close of the transaction
  
  
• CoStar expects the transaction to be accretive to non-GAAP net income per diluted share (as defined below in "Non-GAAP Metrics") in 2012.
  
  
• Expected to increase the combined companies' long-term target margins

J.P. Morgan acted as CoStar's financial advisor, and Simpson Thacher & Bartlett LLP acted as legal counsel to CoStar. Evercore Partners, L.L.C. acted as LoopNet's financial advisor, and Davis Polk & Wardwell LLP acted as legal counsel to LoopNet.

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