Compass-Anywhere deal enterprise value $10B, incl. debt: WSJ

Compass-Anywhere deal enterprise value $10B, incl. debt: WSJ

In a significant move aimed at industry consolidation, Compass, one of the leading real estate brokerages, has agreed to acquire its rival, Anywhere Real Estate, for a total enterprise value of approximately $10 billion, including debt. The all-stock transaction is one of the largest deals ever in the residential brokerage industry and underscores the current trend of consolidation in the sector .

The deal, valued at $1.6 billion, will see Compass acquiring Anywhere Real Estate through a stock swap. Compass will assume $2.6 billion of Anywhere’s debt, net of cash, and will value Anywhere shares at $13.01 apiece, representing an 84% premium over Anywhere’s stock price as of Friday . The combined company will have an enterprise value of approximately $10 billion, including debt, and will control less than a quarter of the country’s home-sales volume .

Compass, based in New York, has approximately 40,000 agents, while Anywhere, based in Madison, New Jersey, has about 51,000 agents at its brokerages and another 250,000 agents at its franchises. The acquisition will provide Compass with exposure to international markets and additional revenue streams from Anywhere’s businesses, including title insurance, escrow, and relocation services .

The residential real estate industry has faced challenges in recent years, with home sales plunging after mortgage rates rose in 2022 and remaining low since then. The number of home sales is on track for one of the slowest years in decades, leading many smaller brokerage firms to sell their companies to larger rivals .

The acquisition is part of a broader trend in the industry where companies are trying to become one-stop shops, making it easier for home buyers and sellers to navigate the complex process and enabling them to earn more revenue through affiliated services. For instance, mortgage giant Rocket recently purchased real estate brokerage Redfin and announced plans to buy mortgage servicer Mr. Cooper Group .

"By bringing together two of the best companies in our industry, while preserving the unique independence of Anywhere’s leading brands, we now have the resources to build a place where real estate professionals can thrive," said Compass Chief Executive Robert Reffkin .