US: RealPage, the owner of vacation rental software provider Kigo, has announced that it has agreed to acquire SaaS real estate property management solution provider Buildium.
In acquiring Buildium, RealPage is broadening its product offering to target smaller multifamily, single-family, associations and commercial real estate market segments. These audiences help to form the SMB market segment, covering an estimated 50 million units in the US market, which represents a key potential growth area for the company.
Furthermore, RealPage plans to significantly expand its platform, by integrating ‘click-on’ capabilities that enhance the renter leasing and living experience, improve the recovery of utility fees, broaden payment processing capabilities, and expand insurance offerings.
By delivering increased value to the SMB market segment, RealPage believes that the applicable revenue per unit can grow significantly.
Buildium is currently used by more than 17,000 customers in 50+ countries, with over two million residential units under its management.
RealPage CEO and chairman, Steve Winn, said: “The SMB market segment represents a tremendous growth opportunity for RealPage. This is an area where technology is underutilised, and currently served by myriad point products.
“Buildium in concert with RealPage enables us to reach deeper into that market, with a best-in-class platform backed by data science.
“RealPage also expects to increase its investment in its Propertyware solution, which is intended for larger single-family managers with more complex property management and accounting requirements.
“Both platforms will be “open,” supporting third-party application integrations through standard APIs and web services. This is in stark contrast to other competitors in the SMB space that are generally closed, limiting client choices for solutions that can integrate to their preferred property management platform,” he added.
Buildium CEO Chris Litster said: “This is a fantastic time for us to join forces with RealPage. Our shared vision around innovation, simplicity and a commitment to stressing service to our clients will enable them to thrive and grow as well as deliver unmatched value for their investors, owners and residents alike.
“I would like to thank our board and Sumeru Equity Partners for their direction and support through this process,” he added.
The acquisition will be finalised according to the fulfilment of certain standard closing conditions, including regulatory approval, which RealPage expects to receive by 31 December. It is set to purchase Buildium for an initial buying price of $580 millon.
Buildium generated a reported $50 million in revenue during the twelve months leading up to 30 September 2019, and expects that figure to reach approximately $60 million by the end of the calendar year, representing over 30 per cent YoY growth.
RealPage CFO Tom Ernst said: “We are really excited about the Buildium acquisition due to the significant market opportunity we can pursue together, the strength of their platform and customer experience, the complementary nature of our platforms, data focus and shared customer-focused culture.”