Carrollton, Texas—RealPage, Inc., a provider of on demand software and software-enabled services to the rental housing industry, announced it entered into a definitive agreement to acquire Multifamily Technology Solutions, Inc. (“MTS”), which offers an Internet listing service for rental properties marketed under the trade name MyNewPlace(r) (www.mynewplace.com) and a suite of syndication and organic lead generation tools marketed under the trade name Rent Engine(r). The Company will acquire MTS for approximately $74.4 million, net of cash expected to be acquired. The purchase price will consist of approximately $63.6 million in cash and approximately $10.8 million paid with shares of RealPage common stock. The Company expects to close the transaction after closing conditions are met, which should be on or prior to Aug. 24, 2011.
The company believes that the acquisition of SeniorLiving.Net, and now MyNewPlace(r), vastly expands its lead origination and syndication capabilities increasing the total addressable market for all RealPage software-as-a-service (SaaS) products and services to at least $9.0 billion. MyNewPlace(r) has approximately 7,500 property listings with 1.8 million rental units. Approximately 500,000 of these units do not presently use any RealPage products and services. These unique units will increase the total number of units using one or more RealPage products and services to 6.9 million units.
MyNewPlace(r) is a generator of traffic in the multifamily industry, which is monetized through its MyNewPlace(r) Internet listing service. MyNewPlace(r) also offers a suite of tools under its Rent Engine(r) solution, which create and manage advertising campaigns for Internet classified directories. MyNewPlace(r) will add significant consumer Internet marketing expertise intended to enable owners to optimize their software-as-a-service marketing tools.
Steve Winn, chairman and CEO of RealPage, said, “Internet marketing in the rental housing industry is highly inefficient because property owners lack transparency into the real costs associated with generating a lease from each Internet lead source. Based on our analysis of best practices across thousands of rental properties, we have concluded that the most cost effective channels of lead generation are: organic lead generation from an owner’s property Website; lead generation from Internet classified directories such as Craigslist; and pay-for-performance Internet listing services. Leases generated from subscription Internet listing services as well as non-Internet advertising can be 2 to 3 times more expensive. As transparency improves, we expect the industry will shift away from expensive channels in favor of organic and pay-for-performance channels. MyNewPlace(r) positions RealPage to capture a disproportionate share of this shift.”