CoStar Group Buying Apartment Finder to Expand its OnlineApartment Marketing Network
Apartment Finder to Remain Separate, Complementary Service to Apartments.com, with Both SitesPowered by CoStar's Multifamily Information
CoStar Group announced an agreement to acquire Apartment Finder and pair the apartment listingportal with CoStar's Apartments.com service, operating the two as separate, complementaryservices, both powered by CoStar's multifamily information.
CoStar is buying the Apartment Finder business from Norcross, GA-based Network Communications,Inc. for $170 million, which amounts to approximately seven times the company's EBITDA for itsfiscal year ended March 31, 2015. CoStar said it expects the acquisition to close within 90 days aftercompleting customary closing conditions. It expects the acquisition to be accretive in 2016, and toachieve run-rate synergies of $20 million within 18 months after the acquisition closes.
Apartment Finder's service offerings include digital advertising on ApartmentFinder.com, which hadabout 13,400 properties advertised on its website at the time the deal was announced. ApartmentFinder is considered one of top five apartment rental listing marketplaces based on advertisingrevenue.
By offering two online marketing solutions as separate brands, CoStar believes managers andowners of apartment properties will benefit from greater exposure options for their listings andmore effective lead targeting.
The strategy is similar to other big rental site operators: Zillow Group owns and operates Zillow,Trulia and the rentals-focused site HotPads, while RentPath Inc. operates Apartment Guide,Rent.com and Rentals.com
After integrating the back ends of the two sites, CoStar expects to leverage the same research,systems, support and sales platform to power both Apartments.com and ApartmentFinder.com,resulting in significant cost savings and operating efficiencies.
"Over the past year we have transformed Apartments.com into one of the fastest growing industrywebsites, and we are excited to do the same for Apartment Finder," stated CoStar Group Founderand Chief Executive Officer Andrew C. Florance, in announcing the acquisition agreement.
Since acquiring Apartments.com in April 2014, CoStar Group redesigned and launched a new, moreconsumer-centric website that now offers more than 550,000 current availabilities online,significantly more than the 18,200 listings when CoStar bought it.
CoStar also kicked off a major search engine marketing campaign to help drive traffic to theApartments.com website, and boosted consumer awareness of the site through a national marketingcampaign featuring acclaimed actor Jeff Goldblum.
The dual marketing initiatives helped Apartments.com vault to the number one apartment rental sitein traffic in March, according to internet traffic authorities comScore, Compete.com, ExperianHitwise and Alexa. Traffic to Apartments.com more than doubled in March 2015 compared to March2014 with 15 million visits and 7 million unique visitors. Leads to property managers and owners areup nearly 67% year-over-year.
Apartment Finder's approximately 400 employees will become CoStar employees. "I am lookingforward to working with the great team at Apartment Finder and welcoming them to the CoStarfamily," said CoStar CEO Florance. "We are all dedicated to building and growing commercial realestate's premier online apartment platform and strengthening CoStar's leadership position in the $2trillion U.S. multifamily asset class."
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