MADISON, N.J. and EMERYVILLE, Calif., July 15, 2014 /PRNewswire/ -- Realogy
Holdings Corp. (NYSE: RLGY) and ZipRealty, Inc. (NASDAQ: ZIPR)
today announced that Realogy has entered into a definitive
agreement to acquire ZipRealty for $6.75 per share in an all-cash transaction valued
at approximately $166 million. With
this transaction, Realogy is acquiring ZipRealty's residential
brokerage operations with 23 offices across the United States and its leading-edge,
integrated real estate technology platform, including its recently
released private-label solution for brokers.
![Realogy logo. Realogy logo.](http://photos.prnewswire.com/prnvar/20140110/NY44427LOGO)
"The acquisition of ZipRealty represents a strategic investment
in the growth of our business and a compelling opportunity to
further enhance shareholder value," said Richard A. Smith, Realogy's chairman, chief
executive officer and president. "This transaction has two uniquely
attractive facets for Realogy. First, we are acquiring an
established, highly productive, technology-based national
residential brokerage operation. Second, we will capitalize on the
innovative technology platform that ZipRealty has honed over more
than a decade of development. ZipRealty's technology provides a
seamless digital experience for consumers, brokers and sales
associates across the entire real estate transaction life cycle. We
intend to fully leverage ZipRealty's comprehensive suite of
world-class technology tools across our business, enabling both our
franchise brands and our company-owned operations to be more
productive, efficient and better serve their customers."
ZipRealty's Board of Directors has unanimously approved and will
recommend the transaction to the company's shareholders. The
transaction will be effected through a tender offer by Realogy and
is expected to close in the third quarter of 2014, subject to the
satisfaction of customary closing conditions, including regulatory
clearance.
Realogy's franchise brands have approximately 247,000 brokers
and affiliated sales associates operating in 13,600 offices
worldwide under such well-known brand names as Better Homes and
Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell
Banker Commercial®, The Corcoran Group®, ERA® and Sotheby's
International Realty®. Realogy's real estate brokerage subsidiary
and largest franchisee, NRT, operates 710 U.S. offices with
approximately 42,600 independent sales associates. ZipRealty is a
national real estate brokerage that leverages leading-edge
technology, comprehensive online marketing and an intelligent
customer relationship management (CRM) platform to attract and
serve customers and to support increased productivity for its
affiliated sales associates.
ZipRealty's profitable owned and operated brokerage operations,
with 1,800 independent sales associates and 23 offices, were
responsible for $2.7 billion in
closed sales volume, and represented the majority of ZipRealty's
$76 million of revenue and
$32 million of gross profit for the
year ended December 31, 2013.
With anticipated transaction synergies and growth, the EBITDA
contribution of ZipRealty's owned operations is expected to be
approximately $20 million annually
within the next three years.
Realogy expects to welcome 17 of ZipRealty's residential real
estate brokerage offices into existing offices operated by NRT.
Realogy intends to continue to operate the remaining six ZipRealty
offices on a stand-alone basis. Post-acquisition, NRT will have
approximately 44,400 independent sales associates.
Smith continued: "ZipRealty's end-to-end and multi-device
software platform and advanced product development capabilities
will further accelerate our efforts to drive web- and mobile-based
lead generation and client conversion. This will also serve to
augment the investments we are already making to improve the
experience of buying and selling a home for consumers, sales
associates and brokers.
"ZipRealty has invested in both the technical talent and the
brokerage expertise necessary to build an impressive array of
custom-designed technology and online marketing tools that generate
incremental business for sales associates and brokers. These assets
and capabilities will provide us with a powerful new slate of
product offerings for our franchisees and company-owned operations.
With ZipRealty's recently released private-label
software-as-a-service product built upon its proven,
fully-integrated digital platform, we expect the technology to
substantially enhance the value proposition of our franchise brands
and increase the productivity of our franchisees. We are very
excited about the prospects for future growth, and we compliment
the ZipRealty product and marketing teams for the development of an
outstanding portfolio of market-ready technology that positions
brokers to better serve their sales associates and their
customers."
"We expect the acquisition of ZipRealty to drive incremental
revenue for our company-owned, franchise and title business
segments," said Anthony E. Hull,
Realogy's executive vice president, chief financial officer and
treasurer. "We are acquiring a residential brokerage operation
that, after operating efficiencies, we anticipate will contribute
meaningful earnings at an attractive valuation. We also expect that
the upfront and ongoing costs associated with the enhanced
technology made available to our franchisees will generate
attractive returns. While deleveraging our balance sheet remains a
very high priority, this unique transaction represents our
opportunistic approach toward enhancing shareholder value through
accelerated long-term growth."
"Integrating ZipRealty's time-tested systems and product
offerings with Realogy's brokerage and franchising operations that
reach approximately 170,000 U.S.-based sales associates provides a
significant opportunity for future growth and product innovation,"
said Lanny Baker, president and
chief executive officer of ZipRealty. "Our owned and operated sales
associate base will become part of one of the most successful real
estate brokerage firms in the nation and will benefit from
Realogy's brand visibility and local presence. This transaction
also represents a compelling outcome for ZipRealty's shareholders,
highlighting the strategic value of ZipRealty's technology-powered
capabilities."
After the transaction closes, Baker will continue in an
executive leadership role within Realogy as chief executive officer
of ZipRealty, reporting to Alex
Perriello, president and chief executive officer of the
Realogy Franchise Group.
Realogy intends to maintain ZipRealty's existing headquarters in
Emeryville, California, using its
agile product development capabilities, its "innovation factory"
methodology, and Realogy's industry presence to advance the
ZipRealty technology platform and deliver new applications across
Realogy's business segments.
Conference Calls to Discuss Transaction
Realogy
and ZipRealty will each host a separate conference call via webcast
today to discuss the transaction.
At 4:30 p.m. ET (1:30 p.m. PT), ZipRealty will hold its call,
hosted by Lanny Baker, president and
chief executive officer. Investors may access the ZipRealty
conference call live via webcast at www.ZipRealty.com or by dialing
(844) 866-0658 (toll free); international participants should dial
(949) 274-7170. In order to join the conference call, participants
will be asked to provide the following conference ID number:
73183872.
The Realogy call, including a slide presentation, will take
place at 4:45 p.m., ET today and be
hosted by Richard A. Smith,
Realogy's chairman, chief executive officer and president, and
Anthony E. Hull, Realogy's executive
vice president, chief financial officer and treasurer, and will
conclude with an investor Q&A period with management.
ZipRealty's Baker will also participate in the Realogy call.
Investors may access the conference call live via webcast at
www.realogy.com under "Investors" or by dialing (877) 869-3847
(toll free); international participants should dial (201)
689-8261. Please dial in at least 5 to 10 minutes prior to
start time. A webcast replay also will be available later the same
day.
Information About Forward-Looking Statements
This communication contains forward-looking statements. These
forward-looking statements reflect the views of Realogy's and
ZipRealty's management regarding current expectations and
projections about future events and the ability of Realogy and
ZipRealty to complete the transactions contemplated by the merger
agreement, including the parties' ability to satisfy the conditions
to the consummation of the tender offer and the other conditions
set forth in the merger agreement, and are based on currently
available information. These forward-looking statements are not
guarantees of future performance and are subject to risks,
uncertainties and assumptions that are difficult to predict;
therefore, actual results may differ materially from those
expressed, implied or forecasted in any such forward-looking
statements. Expressions of future goals and similar expressions
including, "may," "will," "should," "could," "expects," "plans,"
"anticipates," "intends," "believes," "estimates," "predicts,"
"potential," "targets," or "continue," reflecting something other
than historical fact are intended to identify forward-looking
statements.
The proposed transaction has not closed, and the following
factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements:
the possibility that expected benefits and synergies of the
transaction may not be achieved in a timely manner or at all;
revenues following the transaction may be lower than expected;
disruption from the transaction may adversely affect ZipRealty's
relationships with its customers, business partners, employees or
independent sales associates; the conditions to the completion of
the transaction may not be satisfied in a timely manner or at all;
and the other factors described in Realogy's and ZipRealty's most
recent Quarterly Report on Form 10-Q and Annual Report on
Form 10-K filed with the Securities and Exchange Commission.
Unless required by law, neither Realogy nor ZipRealty undertakes
any obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Additional Information
The tender offer
described in this communication (the "Offer") has not yet
commenced, and this communication is neither an offer to purchase
nor a solicitation of an offer to sell any shares of the common
stock of ZipRealty or any other securities. On the commencement
date of the Offer, a tender offer statement on Schedule TO,
including an offer to purchase, a letter of transmittal and related
documents, will be filed with the United States Securities and
Exchange Commission (the "SEC") by Realogy Group LLC and Honeycomb
Acquisition, Inc., an indirect wholly owned subsidiary of Realogy
Group LLC, and a Solicitation/Recommendation Statement on Schedule
14D-9 will be filed with the SEC by ZipRealty. The offer to
purchase shares of ZipRealty common stock will only be made
pursuant to the offer to purchase, the letter of transmittal and
related documents filed as a part of the Schedule TO. INVESTORS
AND SECURITY HOLDERS ARE URGED TO READ BOTH THE TENDER OFFER
STATEMENT AND THE SOLICITATION/RECOMMENDATION STATEMENT REGARDING
THE OFFER, AS THEY MAY BE AMENDED FROM TIME TO TIME, WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders may obtain a
free copy of these statements (when available) and other documents
filed with the SEC at the website maintained by the SEC at
www.sec.gov or by directing such requests to the Information Agent
for the Offer, which will be named in the tender offer
statement.
About ZipRealty, Inc.
ZipRealty is a leading
national real estate brokerage and provider of leading-edge
technology and comprehensive online marketing tools for the
residential real estate brokerage industry. For home buyers and
sellers who increasingly want control, choice and a seamless,
customized service, ZipRealty offers Internet-enabled,
state-of-the-art technology and complete access to accurate, timely
information via its website and mobile applications, which real
estate professionals can combine with their own local knowledge and
personal expertise to offer an exceptional start-to-finish client
experience. For real estate professionals who seek more productive
ways to conduct business, ZipRealty provides technology and online
marketing tools to enhance their online sales channel, including
lead generation, conversion and service of their clients.
ZipRealty's technology and online marketing products serve its
full-service, owned-and-operated residential real estate brokerage
business in 23 offices in 19 markets nationwide, as well as its
Powered by Zip network of leading third-party local brokerages in
21 markets.
About Realogy Holdings Corp.
Realogy Holdings
Corp. (NYSE: RLGY) is a global leader in residential real estate
franchising with company-owned real estate brokerage operations
doing business under its franchise systems as well as relocation
and title services. Realogy's brands and business units include
Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell
Banker®, Coldwell Banker Commercial®, The Corcoran Group®, ERA®,
Sotheby's International Realty®, NRT LLC, Cartus and Title Resource
Group. Collectively, Realogy's franchise system members operate
approximately 13,600 offices with 247,000 independent sales
associates doing business in 104 countries around the world.
Realogy is headquartered in Madison,
N.J.
Media Contacts:
Mark
Panus
(973) 407-7215
mark.panus@realogy.com
Kathy Borruso
(973) 407-5041
kathy.borruso@realogy.com
Stacey Corso
(510) 735-2667
scorso@ziprealty.com
Investor Contacts:
Alicia
Swift
(973) 407-4669
alicia.swift@realogy.com
Jennifer Pepper
(973) 407-7487
jennifer.pepper@realogy.com
Eric Mersch
(510) 735-2682
emersch@ziprealty.com
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SOURCE Realogy Holdings Corp.