Editor’s note: This story has been corrected to note that an offering of Zillow shares that closed Sept. 24 was a follow-on offering dilutive to existing shareholders, not a secondary offering of previously issued shares.
Real estate marketplace Zillow Inc. announced today that it has entered into an agreement to purchase map-based rental and real estate search website HotPads for $16 million.
The all-cash deal, expected to close by the end of the year, will be Zillow’s sixth acquisition in the last two years. But Zillow noted that it’s the first time it’s bought a company that’s primarily a consumer-facing business.
San Francisco-based HotPads attracted 2.8 million unique visitors to its website in October, offering them information on homes for rent, for sale, and in foreclosure. Seventy percent of all the listings viewed that month were homes or apartments for rent, Zillow said, citing figures from Google Analytics.
"This acquisition represents a significant step-change for Zillow Rentals, allowing us to dramatically increase the number of leads we send to landlords," said Zillow CEO Spencer Rascoff in a statement.
"HotPads has a younger, complementary and rental-focused audience," Rascoff said. "Now Zillow will become even more relevant to consumers at the beginning of their real estate life cycle."
HotPads serves both consumers and professionals and has five mobile apps across the iPhone, iPad and Android platforms.
HotPads will join Zillow’s Rental Network, which it claims is the largest on the Web.
Zillow beefed up its rentals play in May when it bought rental relationship management company RentJuice Corp., also based in San Francisco, for $40 million. It adapted RentJuice into Zillow Rentals, a service launched in October that provides a suite of free and paid marketing tools for rental property managers, agents and landlords.
Earlier this month, Zillow announced that it had signed an agreement to purchase the mortgage product and pricing engine Mortech Inc. for $12 million cash and 150,000 shares of stock.
In October, Zillow acquired real estate collaborative shopping tool Buyfolio.
In November 2011, Zillow paid $7.8 million for Diverse Solutions, a provider of listings content that also powers property searches for real estate agents’ websites and mobile platforms. That purchase follwed the April 2011 acquisition of listing syndicator Postlets.
Zillow raised $75.7 million in July 2011 initial public offering and may still have money to burn, having raised another $156.7 million after expenses in a follow-on offering that closed Sept. 24.
In a regulatory filing, Zillow said it would have "broad discretion" in spending that money, and that it could use a portion "for the acquisition of, or investment in, technologies, solutions or businesses" that complement Zillow’s business.
|Contact Inman News:|