The Real Brokerage has completed its $880 million acquisition of REMAX Holdings, bringing one of the real estate industry’s best-known franchise brands under the same corporate umbrella as the fast-growing cloud-based brokerage.
The transaction was completed in a series of steps Monday afternoon, with the final merger becoming effective at 4:30 p.m. ET, according to an 8-K filing by REMAX Holdings. The filing also confirmed that roughly $80 million in cash was paid to former REMAX shareholders, with cash-electing investors receiving about $4.33 per share plus 0.3535 shares of Real REMAX Group stock.
The newly formed Real REMAX Group also announced Monday that its board had authorized a share repurchase program of up to $450 million, or 25 million shares, as the combined company begins operating following the close of the transaction.
Real REMAX Group will begin trading on Nasdaq under the REAX ticker when markets open Tuesday. REMAX shares are expected to be suspended from trading on the New York Stock Exchange before the opening bell. Real CEO Tamir Poleg will serve as chairman and CEO of the combined company.
In a letter sent to agents, brokers, franchisees and employees Monday, Poleg said the central thesis behind the combination was growth.
“The thesis of this transaction is growth. We want to continue Real’s momentum, while returning REMAX to agent-count and revenue growth, and giving broker/owners better tools to grow their teams and that make their offices more competitive.”
The deal also marks another major step in a wave of consolidation reshaping residential real estate. The closing caps a transaction first announced in April that combines Real’s more than 36,000 agents with REMAX’s global franchise network, creating a real estate giant with more than 180,000 agents globally.
A screenshot of the landing page on the new Real REMAX Group website.
Tamir Poleg
REMAX and Real will continue operating as separate brands, Poleg reiterated to agents in his letter, signaling that REMAX will retain its brand and franchise model while Real keeps its existing brokerage model, platform and agent economics. However, executives had previously identified Real’s technology and operating infrastructure as one of the primary opportunities created by the merger.
Real plans to make its reZEN transaction dashboard, Leo AI tools, Real Wallet and other technology and services available to REMAX franchisees and agents on an opt-in basis. Poleg has said the technology could help REMAX offices reduce operating costs and increase efficiency, though the company has previously expressed that REMAX agents will not be required to migrate onto Real’s platform.
The companies have also projected at least $30 million in annual cost savings from the combination. Real executives have pointed to additional potential revenue from offering mortgage, title and other services across the combined network, as well as using Real’s technology to better monetize the roughly 1 million consumer leads generated annually through REMAX’s websites.
The merger also arrives amid a significant leadership transition at REMAX. REMAX President and Chief Growth Officer Chris Lim and Executive Vice President of Strategy Travis Saxton have said that they will not remain on board with the combined company. REMAX Holdings CEO Erik Carlson is also expected to step down as CEO following the acquisition and join the Real REMAX Group board.
Real and REMAX announced the transaction April 27 following a roughly seven-month strategic review at REMAX. Securities filings later showed REMAX considered several potential buyers and competing bids before selecting Real.
Shareholders of both companies overwhelmingly approved the merger Aug. 14. Approximately 99 percent of votes cast by Real shareholders supported the transaction, while REMAX stockholders representing about 78.8 percent of the company’s voting power approved the deal. Days later, REMAX shareholders overwhelmingly elected cash consideration, triggering proration after cash requests exceeded the $80 million available under the merger agreement.
The transaction also faced two shareholder lawsuits filed in New York state court alleging deficiencies in the companies’ merger disclosures. Real, REMAX and the combined holding company disputed the allegations and issued supplemental disclosures earlier this month in an effort to reduce the possibility that the litigation could delay the transaction.
