Our goal is to keep you informed during the seismic shift brought about by this merger between two of the industry’s biggest names. Of course, we don’t have all the answers (yet), but here’s what we know so far, along with some additional selections from our coverage to date. We’ll continue to add to this story as well as our Essential Reading roundup[1], so check back often.
What exactly is the Compass-Anywhere deal?
According to its joint media statement, Compass will acquire Anywhere in a $1.6 billion all-stock deal that would value the combined companies at around $10 billion.
READ MORE: Compass to acquire Anywhere in $1.6B deal, capping rise to top[2]
What needs to happen next for the deal to close, and who pays if it doesn’t go through?
Antitrust regulators at the Federal Trade Commission and Department of Justice are expected to look at the market impact of the merger, since the merged companies would represent a combined market share of 18 percent.
Meanwhile, although the boards of directors of both companies have signed off on the merger, it remains subject to approval by shareholders from both companies. This type of merger could also generate lawsuits from shareholders[3] contesting the terms of the deal.
READ MORE: Here’s what comes next in the Compass-Anywhere deal[4]
How many real estate agents will the combined company have?
Currently, Compass has an agent count of around 40,000, while Anywhere has a total agent count of about 301,000, with 51,000 at owned brokerages and 250,000 agents at franchises. Depending on post-merger agent attrition, the combined company could end up with 341,000 agents in total.
Will Anywhere agents have to use Compass technology?
According to the initial joint statement[5]:
This transaction pairs Compass’ years of investment in technology, innovative marketing offerings, and real estate professionals with Anywhere’s leading brands, broader and complementary businesses, and global reach. The combination of these companies will create a premier real estate platform, enabling agents and franchisees to best serve home sellers and home buyers.
This suggests that Anywhere agents will at some point adopt Compass’ technology platform.
Coldwell Banker agent and Inman Contributor Cara Ameer, concurs, saying, “I see new CRMs, agent websites and marketing tools in our future.”
READ MORE: The Compass-Anywhere merger: Questions from a Coldwell Banker agent[6]
How will the merger affect branding for local brokerages (e.g. Coldwell Banker, Century 21, Corcoran)?
In a follow-up to its initial press statement, a Compass rep[7] affirmed that each Anywhere brand will continue to operate independently and retain its own platforms, individual brand and cultures.
Will Compass continue or expand the use of ‘exclusive listings’ or ‘private inventory’ strategies post-merger?
While the companies haven’t made a statement about a combined stance on private listings, industry insiders believe that part of the goal of the merger would be to expand the impact and reach of a private listings network.
“[The combined companies’] listing power increases significantly and it would make no sense for them to back off the whole concept of private listings now,” former CEO of Collabra Technology Russ Cofano said.
READ MORE: Experts see Anywhere acquisition as bid to remake real estate in Compass’ image[8]
I thought Anywhere wasn’t keen on ‘private listings.’ What happened?
Statements from Anywhere CEO Ryan Schneider and other CEOs under the Anywhere brand umbrella have indicated a reluctance to focus on private listings along with a pragmatic approach in the event that private listings became more common.
“If the world goes to private listings, we will not let our agents be disadvantaged,” Schneider said on an investor call that accompanied the company’s Q4 earnings presentation. “We have more listings to make into private listings than anybody does. I think that’s a short-sighted way for our industry to go.”
For now, Compass is indicating that the companies will operate independently after the merger, “maintaining distinctive brands, platforms, and cultures,” according to a Compass spokesperson.
However, some industry observers, like James Dwiggins, co-founder and CEO of NextHome, a private listing platform combining the two mega-brands may be too tempting for Compass leadership to ignore.
“I can’t imagine Robert not wanting to push that across all the brands,” Dwiggins said in a webinar discussing the deal. “Yes, if they had 210,000 agents in the United States, and 25 percent market share of U.S. residential real estate, it would have an impact.”
READ MORE: Does the Compass-Anywhere deal set the stage for a private listings culture clash?[9]
How might this merger affect the National Association of Realtors (NAR)?
While the companies haven’t yet weighed in on this topic, industry insiders speculate that recent friction between Compass and NAR suggests that the trade group could be at a disadvantage when faced with a mega-brokerage the size of the post-merger Compass.
“I think you’re gonna see Compass basically trying to throw its weight around and causing some change in terms of whether and to what extent they’re members of NAR,” Cofano said. “I think they’re going to push down a much different relationship with NAR, and NAR is going to be the big loser.”
“NAR is going bend over backwards to whatever Reffkin wants,” Courtney Poulos, broker-owner of ACME Real Estate[10], speculated. “I think that NAR would rather keep them and bend to their will than fight against them and have them leave.”
READ MORE: Is NAR the big loser in the Compass and Anywhere deal?[11]
What are the risks for agents if their legacy brand is deprioritized or diluted?
For agents who are reliant on the branding and marketing of their brokerage, a change in brand can have a major impact on their consumer outreach. However, most industry experts promote personal branding for real estate agents to avoid this level of vulnerability.
Derek Carlson of Realty ONE Group in Naples, Florida, writes that agents should maintain a website branded under their name, integrated with their CRM, and consistently post across multiple social media platforms.
READ MORE: How to protect your business during a brokerage merger[12]
What happened with Compass and Anywhere stock after the acquisition announcement?
On Monday, Sept. 22, when the announcement was first published, Compass’ market cap stood at more than $4 billion. Anywhere shares saw an 84 percent bump from Friday’s close to $13.01 following the announcement, while Compass shares lost value.
As part of the deal, Compass will take on about $2.6 billion in Anywhere’s debt. Anywhere’s market value is currently estimated at $800 million.
References
- ^ Essential Reading roundup (www.inman.com)
- ^ Compass to acquire Anywhere in $1.6B deal, capping rise to top (www.inman.com)
- ^ generate lawsuits from shareholders (www.inman.com)
- ^ Here’s what comes next in the Compass-Anywhere deal (www.inman.com)
- ^ According to the initial joint statement (www.compass.com)
- ^ The Compass-Anywhere merger: Questions from a Coldwell Banker agent (www.inman.com)
- ^ a Compass rep (www.inman.com)
- ^ Experts see Anywhere acquisition as bid to remake real estate in Compass’ image (www.inman.com)
- ^ Does the Compass-Anywhere deal set the stage for a private listings culture clash? (www.inman.com)
- ^ Courtney Poulos, broker-owner of ACME Real Estate (www.inman.com)
- ^ Is NAR the big loser in the Compass and Anywhere deal? (www.inman.com)
- ^ How to protect your business during a brokerage merger (www.inman.com)
- ^ Email Christy Murdock (www.inman.com)