RentPath drops acquisition take care of CoStar after FTC antitrust lawsuit – TechCrunch
RentPath, the owner of real estate listing websites including Rent.com and Apartment Guide, announced today that it has terminated its acquisition agreement by CoStar Group after the Federal Trade Commission blocked the sale.
CoStar, a provider of commercial property data and analytics that also operates listing sites like Apartments.com and ApartmentFinder.com, agreed in February to buy RentPath for $ 588 million. The all-cash deal came after RentPath said it would file for Chapter 11 bankruptcy protection. RentPath had already hired financial advisors to restructure more than $ 650 million in debt, the Wall Street Journal reported.
Earlier this month, the Federal Trade Commission cleared an antitrust lawsuit in federal court to block the acquisition. Daniel Francis, associate director of the FTC’s competition bureau, said in a statement that “the acquisition will eliminate price and quality competition that benefits both tenants and property managers,” as the rivalry between CoStar and RentPath maintained promotional rates on their platform which also includes some of the most popular listing sites, low.
In its announcement today, RentPath said its Chapter 11 plan will continue to have the backing of lenders, including alternative asset management companies with “strong track records in successfully investing in companies in similar circumstances.”
The FTC lawsuit and RentPath’s decision to withdraw from the acquisition agreement came as more and more countries around the world were cracking down on technology consolidation. While the United States has lagged behind other governments on antitrust litigation, that is gradually changing as Amazon, Google, and Facebook undergo closer legal scrutiny, and the recent 46 states lawsuit against Facebook that they “illegally” bought competitors. to increase its market power.
The fate of the RentPath / CoStar deal could mean tighter antitrust scrutiny for proptech companies in the US as well. CoStar has grown its business through acquisitions over the past decade and has other deals in the works including listing site HomeSnap, which passed the FTC exam last month, and a reported offer for real estate analysis firm CoreLogic. CoStar and RentPath competitor Zillow is also known for building its business through a series of acquisitions, including Trulia for $ 3.5 billion in 2014.