Deal Will Bring Nearly 19,000 Agents and Over 1,100 RE/MAX
Offices into Company-Owned Regions
Additionally, Nick Bailey,
former Chief Customer Officer, Has Been Promoted to
President, RE/MAX, LLC
DENVER, June 3, 2021 /PRNewswire/ -- RE/MAX Holdings,
Inc. (the "Company" or "RE/MAX Holdings") (NYSE: RMAX), today
announced that RE/MAX, LLC, one of the world's leading franchisors
of real estate brokerage services, has entered into an agreement to
acquire the North America regions
of RE/MAX INTEGRA. Once completed, the acquisition will bring
nearly 19,000 agents (approximately 12,000 in Canada and 7,000 in the U.S.) and more than
1,100 independently owned and operated RE/MAX offices under the
RE/MAX, LLC Company-Owned Region (COR) umbrella. Acquiring
independent RE/MAX regional franchises has long been a key pillar
of the Company's growth strategy and a capital allocation
priority.
"We are thrilled to announce this regional acquisition, which is
by far the most significant in the history of our company in terms
of the size of territory and number of agents," said Adam Contos, RE/MAX Holdings CEO. "The addition
of these strategic and geographically desirable regions enhances
our ability to continue to scale, brings many attractive growth
opportunities and simplifies our operational structure by creating
greater efficiencies. I wish to thank RE/MAX INTEGRA co-founders
Frank Polzler and Walter Schneider – and their amazing families –
for their dedication and passion in growing the RE/MAX
brand over the 40-year tenure with our network. Their RE/MAX
story moves forward with INTEGRA's RE/MAX Europe region, where they'll continue to have
a positive impact on region owners, franchisees, sales associates
and consumers."
The North America regions being
acquired by RE/MAX, LLC include five Canadian provinces (New
Brunswick, Newfoundland and Labrador, Nova
Scotia, Ontario, and Prince
Edward Island) and nine U.S. states (the New England states
of Connecticut, Maine, Massachusetts, New
Hampshire, Rhode Island,
and Vermont, plus Indiana, Minnesota, and Wisconsin).
"Frank and I knew RE/MAX was special from the very beginning in
1980," said Walter Schneider, RE/MAX
INTEGRA President and Co-Founder. "We were excited about taking an
incredibly solid concept that we could help build from the ground
up. It's been a wonderful journey and the friendships we've made
along the way will last a lifetime. We are confident in the
leadership of Adam Contos,
Nick Bailey and the entire RE/MAX,
LLC team, as well as in their ability to facilitate a smooth
transition and ensure a bright future for our Affiliates in
North America. We thank RE/MAX
Co-Founders Dave and Gail Liniger
for their vision, partnership, and friendship during these past
four decades, and we look forward to continuing to represent the
RE/MAX brand in Europe."
"Helping grow RE/MAX into the industry's premier brand and
network has been the experience of a lifetime," said Frank Polzler, RE/MAX INTEGRA Chairman and
Co-Founder. "Our North American regions will be in excellent hands
and I have no doubt that this new leadership will build on our
foundation and take these regions to even greater
heights."
Nick Bailey Promoted to President
With this acquisition, Nick Bailey,
who has served as Chief Customer Officer since September 2019, has been promoted to President,
RE/MAX, LLC effective immediately. As President, Bailey will lead
all aspects of the RE/MAX brand and business globally, focusing on
the growth and success of its membership. Prior to rejoining RE/MAX
in 2019, Bailey served as President and CEO of Century 21 Real
Estate LLC, a subsidiary of Realogy, and as a Vice President at
Trulia/Zillow. Earlier in his career, he spent over a decade at
RE/MAX, LLC, where he led the growth and development for numerous
regions. With more than 25 years of experience within the real
estate industry, Bailey has worn many hats, including those of real
estate agent and broker.
"Adding almost 19,000 agents to our Company-owned regions gives
us the opportunity to scale faster than we have been able to in the
past. It means more agents on the same systems, using the same
products, combining resources, and delivering a more consistent
customer experience," Bailey said. "This, coupled with our revamped
technology stack, which is just beginning to gain traction, creates
the perfect time to bring our biggest client back under the tent so
that even more RE/MAX agents will have unfettered access to our
tools, training and technology."
Strategic Rationale
- Execution of Strategy - Acquiring Independent Regions
has been a key component of the Company's long-term growth
strategy. The acquisition of INTEGRA's North American businesses is
the biggest manifestation of that strategy.
- Growth - The acquisition of these Independent Regions
brings additional growth opportunities with more brokers actively
recruiting agents to the COR network.
- Prudent Allocation of Capital - The acquisition of
Independent Regions has long been a capital allocation priority
given the inherent attractive economics unique to the Company as
the acquirer. The acquisition is expected to be accretive in the
first year and to materially increase the Company's revenue,
profit, and free cash flow.
- Efficiency and Scale - The similarity of the Company's
and INTEGRA'S North American operations will further simplify and
scale the Company's operations through identified cost and
operational synergies.
Transaction Details
The RE/MAX Holdings, Inc. Board of Directors has unanimously
approved the transaction, which is subject to customary closing
conditions, including antitrust review. RE/MAX, LLC is acquiring
RE/MAX INTEGRA's North American operations for approximately
$235 million in cash. RE/MAX has
secured commitments of $235 million
in aggregate additional debt financing to fund the purchase price.
The closing of the transaction is contingent on completion of the
financing. The transaction is expected to close in the third
quarter.
Webcast and Conference Call
RE/MAX Holdings will provide further details on the transaction
during a conference call to be held on Friday, June 4, 2021, beginning at 8:30 a.m. Eastern Time. Interested parties can
access the conference call using the link below:
http://www.directeventreg.com/registration/event/1581748
Interested parties can access a live webcast through the
Investor Relations section of the Company's website at
http://investors.remax.com. Please join the webcast 10 minutes
before the start of the conference call. An archive of the webcast
will be available on the Company's website for a limited time as
well.
History of Regional Acquisitions
RE/MAX, LLC has purchased formerly Independent Regions covering 12
states, two partial states (Northern
Illinois, Southern Ohio)
and the District of Columbia since
its 2013 Initial Public Offering (IPO). The moves are an important
aspect of the RE/MAX growth strategy and a common approach in the
franchising industry. Acquisitions since the IPO include:
Northern Illinois (2017);
Alaska, Georgia, Kentucky, New
Jersey, New York,
Southern Ohio, and Tennessee (2016); and Arizona, Maryland, Nevada, New
Mexico, Virginia,
Washington DC, and West Virginia (2013).
RE/MAX has a worldwide network of nearly 140,000 agents in
more than 110 countries and territories, a global footprint larger
than any of its competitors. RE/MAX, LLC is a wholly owned
subsidiary of RMCO, LLC, which is controlled and managed by RE/MAX
Holdings, Inc.
About RE/MAX Holdings, Inc.
RE/MAX Holdings, Inc. (NYSE: RMAX) is one of the world's leading
franchisors in the real estate industry, franchising real estate
brokerages globally under the RE/MAX® brand, and
mortgage brokerages within the U.S. under the Motto®
Mortgage brand. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative,
entrepreneurial culture affording its agents and franchisees the
flexibility to operate their businesses with great independence.
Now with nearly 140,000 agents across over 110 countries and
territories, nobody in the world sells more real estate than
RE/MAX, as measured by total residential transaction sides.
Dedicated to innovation and change in the real estate industry,
RE/MAX Holdings launched Motto Franchising, LLC, a ground-breaking
mortgage brokerage franchisor, in 2016. Motto Mortgage has grown to
over 150 offices in almost 40 states.
Forward-Looking Statements
This press release includes
"forward-looking statements" within the meaning of the "safe
harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements are often
identified by the use of words such as "believe," "intend,"
"expect," "estimate," "plan," "outlook," "project," "anticipate,"
"may," "will," "would" and other similar words and expressions that
predict or indicate future events or trends that are not statements
of historical matters. Forward-looking statements include
statements related to the anticipated timing of the closing of the
acquisition; the potential benefits of the acquisition, including
the expectations that the acquisition will enhance the Company's
ability to continue to scale, bring many attractive growth
opportunities and simplify the Company's operational structure by
creating greater efficiencies and cost and operational synergies;
the ability of the Company to facilitate a smooth transition for
the regions; the expectation that the acquisition will be accretive
in the first year and to materially increase the Company's revenue,
profit, and free cash flow; and the Company's strategy of
reacquiring independent regions generally. Forward-looking
statements should not be read as a guarantee of future performance
or results and will not necessarily accurately indicate the times
at which such performance or results may be achieved.
Forward-looking statements are based on information available at
the time those statements are made and/or management's good faith
belief as of that time with respect to future events and are
subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. These risks and
uncertainties include (1) pending acquisition may not be
consummated on the terms described herein, if at all; (2) the
Company's ability to successfully close the anticipated acquisition
and to integrate the acquired regions into its business, (3) the
intended benefits of the acquisition may not be realized, (4) the
global COVID-19 pandemic, which has impacted the Company and
continues to pose significant and widespread risks to the Company's
business, (5) changes in the real estate market or interest rates
and availability of financing, (6) changes in business and economic
activity in general, (7) the Company's ability to attract and
retain quality franchisees, (8) the Company's franchisees' ability
to recruit and retain real estate agents and mortgage loan
originators, (9) changes in laws and regulations, (10) the
Company's ability to enhance, market, and protect the RE/MAX and
Motto Mortgage brands, 11) the Company's ability to implement its
technology initiatives, and (12) fluctuations in foreign
currency exchange rates, and those risks and uncertainties
described in the sections entitled "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission ("SEC") and similar disclosures in subsequent
periodic and current reports filed with the SEC, which are
available on the investor relations page of the Company's website
at www.remax.com and on the SEC website at www.sec.gov. Readers are
cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date on which they are made.
Except as required by law, the Company does not intend, and
undertakes no obligation, to update this information to reflect
future events or circumstances.
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SOURCE RE/MAX Holdings, Inc.