WASHINGTON - CoStar Group , Inc. (NASDAQ: NASDAQ:CSGP), a prominent online real estate marketplace and analytics provider, has announced a definitive agreement to acquire Matterport, Inc. (NASDAQ: NASDAQ:MTTR) in a transaction valued at approximately $1.6 billion. The deal, announced Today, will be partially paid in cash and CoStar Group stock, amounting to $5.50 per Matterport share.
Matterport, known for its pioneering 3D capture technology and digital twin solutions, has a significant presence in the real estate sector, offering virtual tours for various property types. The acquisition is aimed at enhancing CoStar Group's existing product offerings by integrating Matterport's advanced AI and digital twin technology across its platforms, including Apartments.com, LoopNet, and Homes.com.
The agreement stipulates that Matterport shareholders will receive $2.75 in cash and an equal amount in CoStar Group common stock for each Matterport share they own. Matterport's 3D technology has been widely adopted, with over 12 million spaces captured in 177 countries. CoStar Group plans to invest in further development of Matterport's spatial technology, leveraging AI and machine learning to extract and reimagine property data.
Andy Florance, Founder and CEO of CoStar Group, expressed enthusiasm about the acquisition, stating that the integration of Matterport will strengthen their mission to digitize the world's real estate. Matterport CEO RJ Pittman echoed this sentiment, highlighting the opportunity for Matterport's shareholders to participate in the growth prospects of the combined entity.
The transaction is expected to conclude within the year, subject to Matterport shareholder approval and customary closing conditions, including regulatory approvals. Matterport's Board of Directors has unanimously approved the deal, with directors, officers, and certain stockholders representing about 15% of Matterport's fully diluted shares entering into voting agreements in support.
Matterport, headquartered in Sunnyvale, California, reported a revenue of $158 million for the year ending December 31, 2023, marking a 16% year-over-year growth. CoStar Group will provide additional details about the acquisition during their earnings conference call scheduled for April 23, 2024.
This strategic move is based on a press release statement and is subject to various risks and uncertainties, including the successful completion of the transaction and the integration of the two companies.
InvestingPro Insights
In the context of CoStar Group's (NASDAQ: CSGP) recent acquisition of Matterport, Inc., it's valuable to look at CoStar's financial health and market performance to understand the backdrop of this strategic move. According to real-time data from InvestingPro, CoStar Group holds a market capitalization of $34.41 billion, reflecting its substantial presence in the online real estate marketplace.
InvestingPro Data metrics provide further insight into CoStar's financials. The company's Price/Earnings (P/E) ratio stands at a high 91.32, indicating a premium market valuation, which can be attributed to investor confidence in its growth prospects and market position. Additionally, the Gross Profit Margin for the last twelve months as of Q4 2023 is reported at 79.98%, showcasing CoStar's ability to retain a significant portion of its revenue after accounting for the cost of goods sold. This is a testament to its efficient operations and strong pricing power within the industry.
While CoStar's EBITDA has seen a decline in growth of -33.81% over the last twelve months as of Q4 2023, the company's robust gross profit margin suggests that it maintains a strong core business that could potentially support future investments and acquisitions such as Matterport.
From the InvestingPro Tips, it's noteworthy that CoStar holds more cash than debt on its balance sheet, providing it with financial flexibility and stability. Moreover, the company's liquid assets exceed its short-term obligations, ensuring that it can meet its immediate financial liabilities. These factors may have contributed to CoStar's strategic decision to pursue the acquisition of Matterport, as it indicates a position of financial strength.
Investors and analysts looking to delve deeper into CoStar's financial metrics and gain additional insights can find more InvestingPro Tips by visiting https://www.investing.com/pro/CSGP. For instance, there are 14 analysts who have revised their earnings downwards for the upcoming period, which could be an essential consideration for investors. Furthermore, for those interested in exploring these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. There are a total of 12 additional InvestingPro Tips available that can provide a comprehensive analysis of CoStar Group's financial health and market position.
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