Zillow expanding through acquisition
With the real estate market finally coming back into full swing investors have search for exposure to the space. Shares of Zillow (NASDAQ:Z) in particular have fared well this year; year to date shares are up more 228%. Zillow is a home and real estate marketplace dedicated to helping homeowners, home buyers, sellers, renters, real estate agents, mortgage professionals, landlords and property managers conduct business within all aspects of the industry. Management at Zillow have created a unique platform which resembles the best of social media, real estate, and business.
On Monday morning the street was welcomed to an interesting acquisition. Zillow is buying the New York City-focused online real estate company StreetEasy for $50 million to strengthen its foothold in on one of the country’s hottest markets. New York has long been a desirable place to live and conduct business but more recently its real estate prices have soared to meteoric levels. StreetEasy offers sales and rental listings through partnerships with New York real estate firms. Moreover, the company provides information about condominiums, co-ops, new developments and luxury real estate. Zillow’s Chief Executive Officer had this to say about the deal:
“StreetEasy is an incredibly strong and recognized brand in New York City, and complements Zillow’s dominant and growing national brand,”
This acquisition will fit well as both companies have aligned their interests in the New York market. Zillow will be able to leverage its technological background and platform to pull a greater number of clients out of StreetEasy’s network. Additionally, the company announced it would be taking advantage of the rise in share price through a secondary offering of 2.5 million shares. Certain shareholders are offering an additional 2.5 million shares. The company won’t receive any proceeds from the the selling stockholders. Following the news shares are down 4% early in the session amid broad market weakness.
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