SHARES in REA Group (ASX:REA) surged around 4 per cent this week after the online real estate business announced it had acquired the country's largest share accommodation website Flatmates.com.au.
REA Group bought the Flatmates website for an initial $25 million although it may pay more depending on the performance of the site over the next two years.
Flatmates was established in 1990 and is Australia's biggest share accommodation website with an average of 2.6 million visits and over 9 million flatmate searches monthly.
Completion of the transaction is expected in the coming weeks.
REA Group CEO Tracey Fellows says the purchase is on the back of enormous growth in the sharing economy.
"The share accommodation segment is one of the fastest growing segments in the Australian property market with traffic across the sector growing at over 50 per cent year-on-year," says Fellows.
"This acquisition allows us to play a more active role in helping consumers, regardless of what phase of the property lifecycle they are in, to find a home.
"Flatmates is the number one player in share accommodation by both revenue and audience. REA Group is uniquely placed to accelerate that leadership position through the sharing of technology, expertise and reach."
Flatmates co-founders Thomas Clement and Andrew Maloney called the acquisition by REA a natural progression for Flatmates.
"Integration with traditional property sectors will not only enable us to provide an enhanced experience to our current audience but also to renters, homeowners and property investors," says the duo.
Clement will continue his role as CEO of Flatmates following the transaction.
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