Redfin Pays $608M For RentPath After FTC Foils CoStar’s Bid
Redfin, an online residential brokerage, has inked a deal to acquire RentPath, the Atlanta-based owner of ApartmentGuide.com, Rent.com and Rentals.com, for $608M in cash. The move comes after real estate data specialist CoStar Group was unable to acquire RentPath for $588M.
"RentPath has more than 20,000 apartment buildings on its rental websites, and grew its traffic more than 25% last year," Redfin CEO Glenn Kelman said in a statement on Friday. "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."
RentPath's websites drew 16 million monthly visitors on average in 2020, according to Redfin, and recorded full-year 2020 revenue of $194M. Despite those figures, RentPath filed for bankruptcy reorganization about a year ago, citing assets of between $100M and $500M and liabilities between $500M and $1B.
Soon after, CoStar agreed to buy RentPath. At the time, CoStar CEO Andy Florance said that "RentPath was burdened with a heavy debt load that prevented the company from making the necessary investments in building brand recognition and generating traffic from Google."
Later in 2020, the Federal Trade Commission filed suit to prevent the CoStar-RentPath deal going forward, alleging that it would further concentrate online listings for apartments in 49 major U.S. metro markets, to the detriment of both landlords and renters. In December, RentPath called the deal off.
Redfin, unlike CoStar, doesn't have a long history of growth by acquisitions, GeekWire reports. The RentPath deal represents only the second company Seattle-based Redfin has bought since its founding in 2004, the other being Walk Score.
The FTC and the bankruptcy court overseeing RentPath's Chapter 11 proceedings still have to agree to the acquisition.
Investors have been keen on Redfin's business model recently. Not only did its share price see an increase of about 10% on Friday after the announcement of the RentPath deal, but it has also mostly gained ground over the last 12 months after a coronavirus pandemic-related drop in March 2020. A year ago, the company traded for about $31 per share. As of Friday, it was up to about $95 per share.