- REA Group to sell their Malaysian and Thai portals to Property Guru
- Deal - if it goes through - would make REA 18% shareholder in Property Guru
- Overall gain for the divestment will be circa $10 million
The REA Group (ASX: REA) has become the dominant force in real estate advertising in Australia over the past twenty years.
Founded in 1995, they listed on the ASX in 1997, and once they acquired major rival Property.com.au in 2003 became the number one listings and advertising site in the country. They took over from the then-dominant newspaper media companies, and never looked back.
In 2016, the REA Group acquired the iProperty Group, an ASX-listed suite of Southeast Asian property portals. This gave them the number one or two property sites in Singapore, Malaysia, Thailand and Indonesia.
The iProperty sites had been chaired by a former CEO of REA Group, Simon Baker, who is now Chair of another ASX-listed entity, the Proptech Group (ASX: PTG).
The REA Group has announced today that they will be combining the company’s Malaysian and Thai interests (from the iProperty purchase) into another leading south-east Asian proptech company, PropertyGuru.
REA said, “… it has entered into a binding agreement to combine REA’s Malaysia and Thailand businesses with PropertyGuru.”
It is expected the overall gain for the divestment will be circa $10 million, and for the 2021 financial year, the Malaysian and Thai businesses “are expected to contribute approximately $15 million to REA Group revenue and to reduce EBITDA by approximately $11 million.”
The deal will make REA Group a major shareholder (18%) of PropertyGuru, and allow them to appoint a Director to the board.
The move is set to create a class-leading product:
“… this transaction presents a unique opportunity to create the most compelling digital property classifieds company in Southeast Asia and accelerate the next wave of proptech innovation across the region.”
Owen Wilson, REA Group CEO
A number of conditions have been set for the transaction, including a “[condition] on REA’s divestment of its 27% interest in 99 Group, operator of 99.co, iProperty.com.sg and rumah123.com.”
It is also noted REA will retain ownership of the Hong Kong and Myfun business, and that “the transaction does not require REA shareholder approval.”