CoStar Group To Acquire ForRent - Quick Facts

(RTTNews) - CoStar Group, Inc. (CSGP) announced the company plans to acquire ForRent, a division of Dominion Enterprises, pursuant to a definitive agreement for $350 million in cash and $35 million in CoStar Group stock. ForRent is headquartered in Norfolk, Virginia, and has 475 employees located in 38 offices around the United States. ForRent's primary service is digital advertising through a network of four multifamily websites. ForRent.com will remain a distinct, complementary brand to Apartments.com.

At completion of integration, CoStar expects the acquisition to add revenue of approximately $75 million - $85 million, after merging the client base as well as discontinuing certain non-core services. Adjusted EBITDA margins are expected to be in a range of 45% to 55%.

The company expects that ForRent will contribute $17 million - $20 million in revenue in the fourth quarter of 2017, and be slightly dilutive on a non-GAAP net income per share basis due to the impact of integration costs and purchase accounting adjustments.

Scott Wheeler, CFO of CoStar Group, said: "When we combine ForRent with our existing advertising and information revenues from the multifamily industry, we expect to approach a $400 million revenue run rate by the end of 2017."