Mergers and Acquisitions continued to be our most popular news category this year. We've reported on a steady number of M&As through 2023 with the number of stories published similar to previous years.
Interestingly, the usually-active Latin American market doesn't make a single appearance in this year's M&A roundup, with Europe and Asia dominating the headlines in terms of big-money deals.
Speaking of which, we'll start this list with perhaps the most important acquisition of the year...
The news of CoStar Group's imminent arrival in Europe broke in October when CEO Andy Florance took to the stage at the Property Portal Watch conference in Madrid to outline how the business is more interested than ever in putting significantly more of its investments into the European market—one in which CoStar already has a small presence.
Within weeks, a £100M bid was submitted to buy out UK challenger OnTheMarket—a bullish move that targets the supposed duopoly of Zoopla and Rightmove with a business that earns a fraction of the money as the market leader.
By the 4th of December, OnTheMarket shareholders had voted in favour of the takeover deal and by the 12th, a new board was in place.
Rightmove's management doesn't seem to be very worried by the new money in the market but you can be sure that there will be more headlines springing forth from the British market throughout 2024 as CoStar starts to bring its marketing spend to bear.
Adevinta is set to be sold to a private equity consortium led by Permira and Blackstone. A €4.5B loan has already been drawn up, making this acquisition the largest-ever direct lending deal in Europe.
Adevinta reported that revenue from real estate was up 11% year-on-year in its Q3 filings released in November:
Adevinta's portfolio includes real estate verticals in Spain (Fotocasa and Habitaclia), Brazil (VivaReal, and Zap joint venture), France (A Vendre A Louer) and Ireland (Daft.ie, a joint venture) as well as many leading horizontal classifieds platforms (Leboncoin in France, Kleinanzeigen in Germany) and car and job verticals, primarily in Europe.
Although major shareholders eBay and Schibsted are on board with the deal, not everybody is delighted with the offer. Two shareholders spoke out against Schibsted and eBay for their apparent openness to a sale.
Per Johansson, a portfolio manager at equity fund Didner & Gerge—the 20th largest shareholder in Adevinta—said: "It is very puzzling that Schibsted is considering selling at these levels to a private player and delisting Adevinta before delivering on the strategic plan."
Adevinta has taken a great deal of time strategically divesting itself of non-essential assets in marketplaces it deemed to be of lower strategic priority over the last few years.
The last of these came this year, when Hungarian portal company Ingatlan opted to buy out Adevinta's Hungarian assets, bringing a close to a 13-business divestment in three years.
As one of the oldest property portals anywhere in the world, Ingatlan already held a strong position of market leadership in the market and can expect to fortify that position further in the real estate vertical with the addition of the horizontal platform Jofogas.
FazWaz is a brokerage business operating primarily in Thailand in areas of significant interest to foreign investors. The firm earns a commission on transactions, leveraging both in-house agents and private owners and developers.
So when Japanese portal and aggregator operator Lifull purchased FazWaz in February to increase its presence in Thailand, several interesting synergies came to the surface.
Lifull Connect already owns dotproperty and Hipflat in Thailand, and the company highlighted the potential Lifull's management sees in the possibility of integrating FazWaz's lead generation and nurturing system into its portal operations, which earned a net profit of approximately JPY 1Bn ($7M) in 2023:
Meanwhile, FazWaz itself remains a strong performer, recording solid growth since its foundation in 2015. FazWaz generated around 300 million Japanese Yen (around $2.7m) in revenue in FY 2021 at a positive EBITDA margin.
The company's agent count has increased from around 20 in 2020 to around 80 in 2022 and the number of transactions managed has more than doubled to over 440.
Poor Nestaway spent more than 3 rupees for every 1 rupee it earned in 2022, a chaotic financial environment that led to the portal being sold in June for circa $11M—not ideal for a business that was valued at $200M in 2019.
The buyer was Aurum Proptech (formerly Majesco Ltd), which inherited a business that recorded two consecutive years of revenue shrinkage and struggled to match its rivals for web visits.
This raises the question, why bother pursuing the business?
In an NSE filing, Aurum said that Nestaway represented an opportunity to add to its consumer-tech segment, in line with its strategy to create an ‘integrated proptech ecosystem' in India.
Aurum already had an interest in Nestaway; it acquired student co-living subsidiary Helloworld, a subsidiary of Nestaway, in March 2022.
Founded in 2013, Digital Classifieds Group (DCG) operates a portfolio of Asia Pacific's leading & fastest-growing online real estate and general classified marketplaces.
In January, DCG acquired the leading Bangladeshi real estate portal Bproperty from Dubizzle (formerly EMPG) to boost its presence in Bangladesh.
And in October, DCG splashed the cash again to buy the Philippine and Indonesian segments of Lamudi, also from Dubizzle Group, which appeared to be open to divestment opportunities this year.
It means that DCG's assets list now looks like this:
Russian giants Avito and Yandex to be controlled by the same interests?
Forbes broke a story in late November suggesting that Yandex may (or may not) be under offer by a consortium of Russian investors.
The rumour suggests a $6.18B buyout, but more interestingly ties the buyout to an entity with close ties to another Russian classified advertisements website, Avito.
Yandex is under instruction to delist from the Nasdaq by the end of 2023 due to complications surrounding the Russian invasion of Ukraine in February 2022.
General Atlantic is exploring a deal to take a stake in Netherlands-based funda
American private equity firm General Atlantic is interested in taking a minority stake in the Dutch portal Funda.
GA wants to oblige the Dutch Association of Real Estate Agents (NVM) to re-purchase shares if the portal's performance starts to lag or if the association abuses its power—which has been accused of doing in the past to limit market competition and stifle the portal's growth.
CoStar vs Europe. Which European portal could be next?
With OnTheMarket already secured and a minor reorganization in France also complete, CoStar may only be getting started.
If Andy Florance's prediction that the "big game of musical chairs" will end in just two to three years, CoStar's spending plan will only accelerate in 2024.
Markets of interest may include Spain, Italy and Germany, while the Nordic market will be harder to penetrate.
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