Realogy to be Bought by Apollo Group

Real estate franchisor Realogy Corp., which owns Coldwell Banker, Sotheby's International and Century 21, will be acquired by private investor firm Apollo Group for about $6.6 billion or $30 per share, an 18% premium to Friday's closing price. The deal follows the recent acquisition of Equity Office Properties Trust by the Blackstone Group and others for $36 billion, the biggest buyout in history. Realogy is involved in a quarter of all U.S. home sales annually and has almost triple the number of agents employed by Re/Max, its closest competitor. Its earnings are declining, however, because of the housing slowdown and increased competition from online brokerages and discount houses. Still, its $500 million in annual cash flow, relatively low level of debt, strong brand names and longevity in the industry made it an attractive acquisition candidate.
• Sources: Wall Street Journal, New York Times, Reuters, Forbes
• Related commentary: Realogy: Why The Shorts Are Wrong, Zillow to Realtors: Really, We're Not Going to Eat Your Lunch, Faced With Growing Wall Street Scrutiny, Realogy Considers Going Private
• Potentially impacted stocks and ETFs: Realogy Corp. (H), Housevalues Inc. (SOLD), ZipReality (ZIPR), Move Inc. (MOVE), streetTRACKS DJ Wilshire Mid Cap Growth (EMG), Rydex S&P Equal Weight (RSP)

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