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REA Group does a deal for share in PropertyGuru

REA Group has announced that it has entered into a binding agreement to combine REA’s Malaysia and Thailand businesses with PropTech company PropertyGuru.

Under the proposed transaction, REA will transfer ownership of its Malaysia and Thailand entities (which operate iProperty.com.my and Brickz.my in Malaysia and thinkofliving.com and Prakard.com in Thailand) to PropertyGuru in exchange for an 18 per cent equity interest in the company. 

REA will take one seat on the board. 

PropertyGuru is a leading digital PropTech company operating marketplaces in Singapore, Vietnam, Malaysia, Thailand and Indonesia. 

The combined businesses will have access to a deeper pool of expertise, technology and investment, which will accelerate innovation and provide enhanced digital solutions to home seekers, property agents and developers. 

The proposed transaction will provide REA with a strategic shareholding in a larger, more diversified company in a region that continues to experience rapid digital transformation across the real estate sector. 

REA Chief Executive Owen Wilson said building on the success of the group’s operations in Malaysia and Thailand, this transaction presents a unique opportunity to create the most compelling digital property classifieds company in South-East Asia and accelerate the next wave of PropTech innovation across the region. 

The sale agreement contains customary termination events, and completion of the transaction, which is expected to occur in July 2021, is conditional on REA’s divestment of its 27 per cent interest in 99 Group, operator of 99.co, iProperty.com.sg and rumah123.com

Discussions are well progressed in relation to the divestment. REA will retain ownership of its Hong Kong and MyFun businesses. The transaction does not require REA shareholder approval. 

The transaction is expected to result in an overall gain on divestment of about A$10 million. 

In the 2021 financial year, the Malaysia and Thailand businesses are expected to contribute an estimated $15 million to REA Group revenue and to reduce EBITDA (earnings before interest, taxes, depreciation, and amortisation) by about $11 million.

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