Real Estate Digital Acquisition
In May, Solutionstar entered into a definitive agreement to acquire substantially all of the assets of Real Estate Digital and its affiliate for $18 million in cash. RED, based in Aliso Viejo, California with 120 employees, is a fee-based real estate services company that provides online marketing, data, transaction management and digital media solutions. The acquisition price represents a 0.7x multiple on RED’s estimated full year 2014 revenue. The acquisition is expected to close in the second quarter of 2014 at which time Solutionstar will assume RED’s management team and employees.
In online marketing, RED has created more than 25,000 real estate websites and provides technology services to over 300,000 agents, or approximately 30% of the market. In data services, RED has license to 98% of all Multiple Listing Service (“MLS”) listings. In transaction management, RED licenses end-to-end software to 125,000 real estate agents. RED is also a lead aggregator and provides search engine optimization services.
RED will enable Solutionstar to diversify its revenue streams, gain access to a significant third-party customer base, and drive traffic to our websites. The acquisition enables Solutionstar to cross-sell services to RED’s existing third-party clients, while enhancing Nationstar’s purchase origination and servicing opportunities when properties are listed for sale. Over time, this acquisition should enable Nationstar to replace third-party vendors with enhanced RED-developed technology, resulting in both significant cost savings as well as new revenue opportunities. For additional information, please visit RED’s website at www.realestatedigital.com