CoStar Group Strengthens UK Operations by Acquiring Propex
Commercial, Retail and Investment Property Information Provider to be Operated by CoStar’s UK Subsidiary, FOCUS Information Limited
BETHESDA, MD – February 15, 2007 – CoStar Group, Inc. (NASDAQ: CSGP) today announced that its wholly owned U.K. subsidiary, CoStar Limited, has acquired Property Investment Exchange Limited (Propex) for approximately $22 million in cash and stock.
Propex is a company that provides web-based commercial property information and operates a unique electronic platform that facilitates the exchange of investment property in the UK. The eight year-old company will be operated by CoStar Group’s UK subsidiary, FOCUS Information Limited.
Propex operates a suite of electronic platforms and listing websites that give users access to the UK's commercial property investment and leasing markets. The company also provides retail, office and industrial property information on-line. Founded in 1999, Propex has approximately $5 million in annual revenues and around 500 customers.
“We’re excited about acquiring a profitable company whose products and services complement those of our existing UK. operations,” said Jonathan Bray, Managing Director of FOCUS and director of CoStar’s European operations. “We anticipate that this acquisition will enable us to strengthen the quality of our information offerings throughout the U.K. and to standardise the presentation of commercial property data to our customers. We expect that Integrating FOCUS' historic strength in research & deals with Propex's comprehensive and well regarded availability and transaction platforms will bring a unique product offering to the fragmented UK marketplace. “
Paul Marples, managing director of Propex, adds: “We are pleased to have integrated with a like-minded partner that shares the same aspirations upon which Propex was founded. The combined resources of both companies will enable us to further develop our range of services and ultimately, create a definitive platform for commercial property listings, data and research across the UK and Europe.”
CoStar Limited, through FOCUS, also controls GRECAM, a French company with high-quality information on approximately 14,000 commercial properties in and around Paris. GRECAM was acquired by CoStar Limited last month for about $2 million.
We believe that the Propex acquisition solidifies CoStar’s market position in the UK as the leading commercial real estate information provider. The GRECAM acquisition represents a foothold in the French market, with the view of rolling out the CoStar model to Europe over time. We do not expect either the Propex or GRECAM acquisitions to materially affect CoStar’s earnings.
“While CoStar has clearly established itself as the leading provider of on-line commercial real estate information services in the US and the UK and we have a strong track record in acquiring and integrating complementary businesses, we remain in the very early stages of penetrating what we believe to be a vast, global market for property information,” said Andrew C. Florance, president and CEO of CoStar Group. “We believe that both the Propex and GRECAM acquisitions represent solid investments that will strengthen our delivery of information services and provide real value to our customers. We also anticipate that these acquisitions represent exciting avenues of growth for our company over the long term.”
CoStar plans to fully integrate its UK and French operations with those of the US in order to provide a uniform online commercial property information platform across all its subsidiaries.