Redfin Jumps on Deal to Buy Apartment Search Firm RentPath

Home-sales platform Redfin is set to acquire apartment-search firm RentPath for $608 million cash.
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Shares of Redfin  (RDFN) - Get Report were higher after the real estate brokerage firm said it had agreed to buy apartment-rental-website operator RentPath for $608 million cash.

RentPath, Atlanta, owns ApartmentGuide.com, Rent.com and Rentals.com.

The deal will help Redfin strengthen its search optimization, increase value for advertisers, and boost traffic with an audience that is looking to buy or rent homes, the Seattle company said.

At last check Redfin shares rose 10% to $95.15.

The deal is subject to conditions including antitrust clearance and approval from a bankruptcy court.

The closing of the transaction is not contingent on financing. 

"RentPath has more than 20,000 apartment buildings on its rental websites, and grew its traffic more than 25% last year," Redfin Chief Executive Glenn Kelman said in a statement.

"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 network of websites reached 16 million monthly visitors on average in 2020 and recorded full-year 2020 revenue of $194 million, the company said.

This deal has the potential "to help more consumers find the right home and help property managers find residents," RentPath CEO Dhiren Fonseca said.

"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," he added.

A bit more than a year ago RentPath filed for protection from creditors under Chapter 11 of federal bankruptcy law in U.S. Bankruptcy Court in Delaware.

RentPath also agreed to be acquired by CoStar Group,  (CSGP) - Get Report the Washington real estate data and analytics group.

But in December, RentPath said that it had terminated that deal after the Federal Trade Commission determined to sue to block the deal.

The agency said that RentPath "[presented] a strong competitive alternative to CoStar and the merger would have eliminated that competition to the detriment of customers," Rentath said in a statement.