Redfin Finalizes $608M RentPath Acquisition Earlier Than Expected
Redfin has acquired RentPath nearly two months after CoStar Group paid RentPath a $52 million break fee for a failed acquisition in 2020.
Redfin has completed the acquisition of RentPath for $608 million in cash, according to an announcement on Monday. RentPath is the parent company of rental platforms ApartmentGuide.com, Rent.com, Rentals.com and Lovely.
“We’re over the moon that RentPath and Redfin are officially hitched,” Redfin CEO Glenn Kelman said in a written statement. “A deal that we expected to take 90 days to approve closed in 42, and now we can’t wait to tell RentPath’s property-management customers, who were once uncertain about the company’s future, about our big plans to double our audience of people seeking a home to rent.”
“Already, we’ve discovered that RentPath’s modern technology for importing rental listings fits perfectly with ours, and that the two companies have a shared vision to make renting a home fast, easy and magical, for consumers and property-management companies alike,” Kelman added.
Kelman said RentPath’s rental listings should be available on Redfin by 2022. In the meantime, he said, RentPath’s leadership team will work on improving its offerings for multifamily property managers and consumers alike.
The company’s headquarters will remain in Atlanta, with RentPath President Dhiren Fonseca staying on board until Redfin finds a permanent leader to run the rentals business.
“The RentPath team is thrilled to be joining Redfin because we share a customer-first philosophy,” Fonseca added. “The response to the acquisition news from our multifamily customers has been tremendous, and they are eager to tap into Redfin’s massive audience and see us build upon the all-time highs in traffic and leads we delivered in 2020.”
Monday’s announcement is the culmination of a year of drama for RentPath, which filed for Chapter 11 bankruptcy in late February 2020 after deflated revenue streams and ballooning operations and marketing costs placed the company in financial peril.
CoStar founder and CEO Andrew Florance announced plans the same month to purchase RentPath for $587.5 million, as he was confident his team could place the company back on solid footing.
“RentPath has a 30-year track record of outstanding service to the multifamily industry, developing thousands of meaningful customer relationships,” Florance said in February 2020. “Following restructuring in bankruptcy, CoStar Group expects the combined companies to benefit from synergies and plans to invest in building RentPath’s online brands and traffic to provide improved quantity and quality of lead flow to advertising clients.”
However, the deal between CoStar Group and RentPath fell through when The Federal Trade Commission claimed it would unfairly “eliminate competition in the rental listing space.” CoStar Group paid RentPath $52 million of a $60 million break fee in March, officially ending the battle between both companies and allowing Redfin to complete their bid.
Since then, CoStar group acquired HomeSnap for $250 million , auction site Ten-X for $190 million and the URL houses.com for an undisclosed amount.