Realogy agrees to acquire ZipRealty for $166M
MADISON, N.J.– July 16, 2014 – Realogy Holdings Corp. announced that it entered into a definitive agreement to acquire ZipRealty for $6.75 per share in an all-cash transaction valued at approximately $166 million.
Through the transaction, Realogy acquires ZipRealty's residential brokerage operations with 23 offices across the United States and its real estate technology platform, including its private-label solution for brokers.
"This transaction has two uniquely attractive facets for Realogy," says Richard A. Smith, Realogy's chairman, chief executive officer and president. "First, we are acquiring an established, highly productive, technology-based national residential brokerage operation. Second, we will capitalize on the innovative technology platform that ZipRealty has honed over more than a decade of development."
According to Smith, Realogy intends to "fully leverage ZipRealty's comprehensive suite of world-class technology tools across our business, enabling both our franchise brands and our company-owned operations to be more productive, efficient and better serve their customers."
Realogy's brands and business units include Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group, ERA, Sotheby's International Realty, NRT LLC, Cartus and Title Resource Group. Collectively, Realogy's franchise system members operate approximately 13,600 offices in 104 countries. Realogy's real estate brokerage subsidiary and largest franchisee, NRT, operates 710 U.S. offices with approximately 42,600 independent sales associates.
ZipRealty's Board of Directors will recommend the transaction to the company's shareholders. It will be completed through a tender offer by Realogy and is expected to close in the third quarter of 2014, subject to the satisfaction of customary closing conditions, including regulatory clearance.
ZipRealty, with 1,800 independent sales associates and 23 offices, had $2.7 billion in closed sales volume, $76 million of revenue and $32 million of gross profit for the year ended Dec. 31, 2013.
Realogy expects to add 17 of ZipRealty's residential real estate brokerage offices into existing offices operated by NRT. Realogy intends to continue to operate the remaining six ZipRealty offices on a stand-alone basis. Post-acquisition, NRT will have approximately 44,400 independent sales associates.
Smith says the ZipRealty acquisition will "further accelerate our efforts to drive web- and mobile-based lead generation and client conversion."
After the transaction closes, Lanny Baker, president and chief executive officer of ZipRealty, will continue in an executive leadership role within Realogy as chief executive officer of ZipRealty. He'll report to Alex Perriello, president and chief executive officer of the Realogy Franchise Group. Realogy intends to maintain ZipRealty's existing headquarters in Emeryville, California.
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