Property management software company RealPage Inc. has signed a definitive agreement to acquire the operator of popular online apartment marketplace MyNewPlace, the company announced Monday. The transaction is expected to close on or before Aug. 24.
A consumer search site for rentals, MyNewPlace routinely ranks among the top 20 most-visited real estate websites in the country, according to Web rankings from Experian Hitwise. The site ranked 11th in July, with 1.21 percent market share among real estate sites. MyNewPlace won an Inman Innovator Award for most innovative rental or new-home online service in 2006, the year the site was founded.
RealPage has agreed to pay about $74.4 million to acquire Multifamily Technology Solutions Inc., owner and operator of MyNewPlace. RealPage will pay most of the acquisition’s price tag in cash (about $63.6 million) and pay the rest in stock (about $10.8 million).
Earlier this month, RealPage acquired senior housing site SeniorLiving.net for $4.5 million in cash. The company plans to integrate MyNewPlace and SeniorLiving.net, as well as 2010 acquisitions eREI and LevelOne, and its recently announced LeaseStar Marketplace, into a single rental marketplace.
The marketplace will include a lead-generation platform; a centralized leasing center; dynamic visual content, including animated floor plans, site maps and photos; a booking engine that will allow consumers to lease a rental unit online; and management systems that track and manage leads by channel, the company said.
"Ultimately, we expect our offering to include tools that increase lead-conversion rates, accurately analyze the true cost of generating leases from each lead source, and enable the efficient allocation of advertising dollars to generate more leases at a lower overall cost," said Sina Shekou, president of LeaseStar, in a statement.
MyNewPlace offers property owners a pay-per-performance ad model. In its most popular program, property owners pay a monthly fee and get an automatic discount if they don’t receive a targeted number of leads. Property owners also have the option of paying a fee only when a lease generated from the website is signed.
Based on a company analysis, pay-for-performance Internet listing services are among the most cost-effective channels of lead generation, said Steve Winn, chairman and CEO of RealPage, in a statement.
"As transparency improves, we expect the industry will shift away from expensive channels in favor of organic and pay-for-performance channels. MyNewPlace positions RealPage to capture a disproportionate share of this shift," Winn said.
RealPage said the acquisition of MyNewPlace will increase the total number of units using one or more RealPage products and services to 6.9 million units.
MyNewPlace generated $16.1 million in revenue, with a loss of $2.3 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the 12 months through June 30.
As a result of the acquisition, RealPage now expects its net income for the third quarter to be in the range of $6.3 million to $6.6 million. For the full year ending Dec. 31, the company expects net income between $24 million and $25.8 million. Expected net income does not include the impact of potential costs associated with a lawsuit brought against the company by competitor Yardi Systems earlier this year.