PropertyGuru Group, the Singapore-based online real estate major backed by private equity giants KKR and TPG Capital, on Monday announced that it has agreed to acquire the operating entities of Australia-listed REA Group in Malaysia and Thailand.
The acquisition involves iProperty.com.my and Brickz.my in Malaysia and thinkofliving.com and Prakard.com in Thailand. The financial details of the deal were not disclosed.
The acquisition comes three months after PropertyGuru was reported to be considering a US listing through a merger with a special purpose acquisition company (SPAC).
As part of the acquisition, REA Group, an Australia-listed global digital business that specialises in property marketplaces and data assets, will receive an 18% equity interest in the enlarged PropertyGuru Group and appoint a director to the board.
In a separate announcement, REA Group said the completion of the deal is conditional on the divestment of its 27% interest in 99 Group – operator of real estate classifieds platforms 99.c0, iProperty.com.sg, and rumah123.com – that competes with PropertyGuru.
99 Group CEO Darius Cheung told Bloomberg the company is currently in talks with investors to raise capital, some of which will be used to acquire the stake being divested by REA. When contacted by DealStreetAsia, he declined to divulge the value of the stake or name the potential investors.
In its disclosure to the Australian Securities Exchange (ASX), REA Group said the transaction is expected to result in an overall gain on divestment of approximately A$10 million ($7.7 million). In FY21, the Malaysia and Thailand businesses are expected to contribute approximately $15 million to REA Group revenue, it added.
PropertyGuru operates property marketplaces in five of the biggest Southeast Asian economies –Singapore, Malaysia, Thailand, Indonesia, and Vietnam. It claims to cater to 35 million property seekers every month.
The company has been operating in Malaysia for the past decade through PropertyGuru Malaysia and has witnessed a clear shift in consumer preferences for online solutions that simplify the home searching and buying journey.
Both brands – PropertyGuru Malaysia and iProperty.com.my – will be retained following the transaction, which is expected to close in July 2021.
In November 2020, PropertyGuru also agreed to acquire Malaysia’s largest online property data company, MyProperyData, for an undisclosed amount.
In Thailand, the firm operates DDproperty.com, which it claims is the leading property marketplace in the country, attracting over three million visits each month.
“As a Singapore-based and home-grown, regional proptech leader, this is a key milestone in PropertyGuru’s history,” said Olivier Lim, chairman of the board at PropertyGuru Group. According to a Bloomberg report, the deal marks the biggest acquisition in the firm’s 14-year history.
REA Group CEO Owen Wilson said the acquisition creates new opportunities for collaboration and access to a deeper pool of expertise, technology, and investment.
“Building on the success of our operations in Malaysia and Thailand, this transaction presents a unique opportunity to create the most compelling digital property classifieds company in Southeast Asia and accelerate the next wave of proptech innovation across the region,” Wilson said in a disclosure to the ASX.
PropertyGuru’s acquisition comes less than a year after it announced fresh funding of about $220 million from global private equity giants TPG and KKR to accelerate its growth in its key markets, especially Malaysia and Vietnam.
The company was founded in 2007 by entrepreneurs Steve Melhuish and Jani Rautiainen. It scrapped plans for an initial public offering on the Australian stock exchange in 2019 on valuation concerns. In March, the company was reported to be considering a US listing through a merger with a SPAC.