Redfin (RDFN) to Acquire RentPath for $608 Million

February 19, 2021 6:32 AM EST

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Redfin (NASDAQ: RDFN) has entered into an agreement to acquire RentPath, the Atlanta-based owner of ApartmentGuide.com, Rent.com, and Rentals.com, for $608 million in cash. The acquisition will bring together a leading site for buying a home with a leading site for renting a home, giving anyone trying to move a complete view of her options.

"RentPath has more than 20,000 apartment buildings on its rental websites, and grew its traffic more than 25% last year," said Redfin CEO Glenn Kelman. "We can almost double that audience, as one in five of Redfin.com's 40+ million monthly visitors also wants to see homes for rent. Together with RentPath, we can create an online destination for every North American to find a home."

"We are energized by the transformational potential of this combination to help more consumers find the right home and help property managers find residents," said Dhiren Fonseca, RentPath's CEO. "RentPath's customers experienced all-time highs in traffic and leads from us last year and our value proposition to multifamily property managers has never been better. By acquiring RentPath, Redfin will be as committed as we are to the rental market. As part of the Redfin family, our platform will be well positioned to lead the market in the quality and value of our products, while giving our current and future customers access to many more high-intent renters through Redfin's extensive network."

Redfin, the technology-powered real estate brokerage, operates the #1 nationwide brokerage search site. The company uses a combination of local real estate agents and technology to make it easier, faster and less costly to buy or sell a home.

RentPath simplifies the apartment search experience for millions of consumers, connecting property-management companies with qualified prospective renters. The RentPath network of websites reached 16 million monthly visitors on average in 2020, and recorded full year 2020 revenue of $194 million.

Strategic Rationale

  • Better Search Experience: More than a third of North American adults currently rent, so showing rentals is an important expansion of Redfin's mission. When consumers think of home, they'll think of Redfin, whether they are hoping to rent or buy, sell, or find a tenant. Redfin expects RentPath's rental listings to be on Redfin.com in late 2022.
  • Better Value for Advertisers: Redfin will increase RentPath's reach, creating more rental opportunities for the rental properties promoted on RentPath sites. Redfin estimates that 10 million of Redfin's 40+ million monthly online visitors may also be interested in rental properties.
  • Traffic Growth: Both Redfin and RentPath grew traffic by over 20% in 2020 and have powerful channels for meeting customers and marketing listings directly to consumers. Together with RentPath, Redfin will aim to compete with the largest portals on every front, for every visitor.
  • Improving the Rental Experience: While Redfin does not expect to hire real estate agents to represent renters, the company is excited about the opportunities to make the whole process of renting an apartment better.

Additional commentary from Glenn Kelman about the expected benefits of the acquisition is available at https://www.redfin.com/news/rentpath-acquisition.

Conference Call

Redfin will provide further details on the transaction on a conference call which will take place on February 19, 2021 at 5 a.m. Pacific Time / 8 a.m. Eastern Time. Call information will be posted on Redfin's investor relations website.

Key Business Metrics

Redfin

RentPath

Headquarters

Seattle

Atlanta

Employees (as of 12/31/20)

~4,000

~700

Avg Monthly Visitors*

39 million

16 million

Organic Visitors YoY Growth*

23%

26%

Total Revenue*

$875 million

$194 million

*Reflects trailing twelve months ended September 30, 2020 for Redfin, and full year 2020 for RentPath.

Transaction Details

The Boards of Directors of both companies have approved the transaction, which is subject to customary closing conditions, including antitrust approval and approval from a bankruptcy court. The closing of the transaction is not contingent on financing. Further details around closing will be forthcoming, at which time additional organizational and operational details will be announced.



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