CoStar Group acquires UK firm. (Technology Update).
CoStar Group, Inc., the leading provider of information services to the U.S. commercial real estate industry, announced a cash offer for London-based Property Intelligence plc. The offer values the existing issued shares of Property Intelligence at approximately $16.4 million.Property Intelligence, whose operations principally consist of Focus Information, is a leading provider of commercial real estate information services in the United Kingdom. The company was founded in 1984 and has approximately 700 customers, including the top 20 U.K. real estate services firms. Focus Information's main products provide information on buildings, available space, requirements, tenants, lease deals, comparable sales, planning information and photos across the United Kingdom.
"We are excited about the opportunity to acquire such a strong market position in the United Kingdom," stated CoStar Group CEO Andrew C. Florance. "The Focus Information business that we are acquiring is profitable. Its products enjoy a leadership position and there is a strong management team in place to achieve continued growth. Our companies have fundamentally the same business model."
According to Florance, the addition of a strong U.K. operation will position CoStar to deliver integrated service to its multinational customers. Among CoStar's 20 largest U.S. customers, about two-thirds have operations or affiliates in the United Kingdom.
"These clients are involved in the vast majority of leasing and sales transactions on behalf of Fortune 1000 companies in the United States and the United Kingdom, and will benefit from receiving standardized commercial real estate information from a single provider," Florance noted. "We believe convenient access to information on the U.S. and the U.K. will enhance our customers' ability to service their international clients, and will ultimately expand the overall market for commercial real estate information services.
CoStar has secured employment agreements with three key managers who collectively have 18 years of tenure in the Property Intelligence operations. Jonathan Bray, who has over six years of experience managing all aspects of Focus Information, will serve as managing director of Property Intelligence, along with Jeremy Carr-Smith, business development director, and Matthew Hopkinson, operations director. Nicholson will continue to assist Property Intelligence in an advisory role.
"I'm excited about the future of the combined companies," stated Bray. "Given the similarity in the business of CoStar and Property Intelligence, the combination of these businesses should create an opportunity for CoStar to use its competitive advantages in software, capital, client relationships and scale to achieve a growth in sales and an improvement in margins that would be difficult for Property Intelligence to achieve independently."
The United Kingdom represents approximately a 20% expansion of CoStar's potential market, based on the population of the respective regions, Florance estimated. Western Europe overall would more than double the size of CoStar's potential market in the United States. "The London market is comparable in size to New York or Los Angeles," Florance pointed out. "We have a lot of experience in these markets. We know how they perform over time and we are excited about what we believe we can accomplish there over time."
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| Title Annotation: | Property Intelligence PLC |
|---|---|
| Publication: | Real Estate Weekly |
| Geographic Code: | 4EUUK |
| Date: | Dec 11, 2002 |
| Words: | 507 |
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