CoStar Group, Inc. (NASDAQ: CSGP), the information and
DMG Information, Inc., a division of U.K.-based Daily Mail and General Trust, plc, agreed to sell PPR in exchange for shares of CoStar common stock valued at approximately $22 million, according to CoStar. PPR has annual revenues of about $18 million and is profitable, the company said.
CoStar will preserve PPR's separate identity and operate it as an independent subsidiary, executives said. The PPR staff will remain in Boston and in its offices in London and Hong Kong.
"Because of this economic environment, demand has never been greater for accurate analysis and forecasting to help our clients manage risk and opportunities in both the debt and equity components of their commercial real estate portfolios,” said CoStar president and CEO Andrew Florance in a statement.
PPR’s economists and analysts will increase CoStar’s research capability, and its extensive database of commercial real estate information will create growth opportunities for the company, Florance noted.
"The more closely we looked at PPR, the more compelling the combination of our firms became, offering immediate potential to meet the strategic objectives for each of our companies," Florance said. "CoStar has one economist on staff whereas PPR has a team of 40. PPR does not have any primary
Also, PPR has a sales staff of only six people, while CoStar has about 150 sales professionals, the CEO added.
Both companies focus on
CoStar withdrew offer to buy Reis
Last year, CoStar offered to acquire Reis, Inc. (Nasdaq:REIS), before withdrawing the offer. However, CoStar now says PPR is a better strategic fit because of its larger team of economists and business relationship strategies.
The acquisition of PPR is part of a larger strategy to leverage CoStar'sposition by acquiring companies that can position the group for strong future growth, company executives said.
More information about the acquisition will be available on Thursday during the company’s quarterly earnings call.
Bret Wilkerson, CEO of PPR, called the merger a good opportunity for both companies, and said he has high regard for the business CoStar has built over the past 20 years.