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. (NYSE:H), Housevalues Inc. (SOLD), ZipReality (NASDAQ:ZIPR), Move Inc. (NASDAQ:MOVE), streetTRACKS DJ Wilshire Mid Cap Growth (EMG), Rydex S&P Equal Weight (NYSEARCA:RSP)
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