A leading Australian provider of customer relationship management (CRM) software and investment products for real estate has entered a deal to be acquired by US multinational MRI Software for $93.4 million, representing a 131 per cent premium to Friday's closing price.
The board of Melbourne-headquartered PropTech Group (ASX: PTG), which claims to have its products used by more than one in four real estate offices in Australia and New Zealand, unanimously recommends shareholders accept the takeover offer at $0.60 per share.
The offer signifies the highest share price for PTG since November 2021 - short of highs above $0.80 achieved in May of that year but still more than double the price of $0.25 when the company relisted in November 2020.
A depreciation of the Australian dollar means the premium is not as pronounced in USD terms for the bidder versus 2020 levels, although MRI Software has had a presence in Australia since 1995 and further strengthened its position with the acquisition of Rockend in 2019, followed by the acquisitions of Box+Dice in 2021 and LeaseEagle at the start of this year.
On its website, MRI Software reports its products are used to manage more than 90,000 commercial lease units and more than 62 million square metres of property.
PropTech's brands - including VaultRE, VaultEA, EagleCRM, Real Estate Investar, Website Blue, Designly, and RentFind Inspector - are reportedly used by more than 60,000 property professionals, and facilitated more than $179 billion worth of property transactions in the past 12 months.
The acquirer notes many of PTG's products would complement and strengthen its MRI Living suite of solutions for residential sales and property management, and add new capabilities in other areas.
"This acquisition brings immediate value to our real estate agency clients in the region and represents a significant investment in the future of the real estate sector more broadly," says MRI Software's managing director and senior vice president (Asia Pacific), David Bowie.
"In the same way fintech fuelled growth and efficiencies in banking and finance over the last decade, we believe PropTech will propel the next generation of real estate to ensure its long-term value and contribution to our national economies," Bowie said.
"The business of finding, buying, selling, renting, and investing in property comes with the same complexities as any advanced industry – and needs the right technology to enable its potential. A combined MRI and PTG will be well-equipped to help modern real estate agencies respond to changing consumer expectations and market dynamics."
The two parties have entered a scheme of implementation deed for the acquisition, which has been recommended by the board in the absence of a superior proposal and subject to the findings of an independent expert report.
"While we believe we are in a strong position to continue to drive strong growth in 2023 and beyond by executing on our clear strategic plan that combines organic and inorganic initiatives, the Board believes that the proposal received from MRI represents a compelling opportunity for PropTech shareholders to realise a significant premium to the value of their PropTech shares via the certainty of cash consideration and in a timeframe that would not otherwise be available," says PropTech chairman Simon Baker.
Subject to Australian Securities and Investments Commission (ASIC) registration and court approval, the scheme booklet is expected to be dispatched to PropTech Group shareholders in December 2022, with a view to hold a vote in January next year with implementation anticipated in February.
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