CoStar Group has entered into a definitive agreement to acquire Vexcel Group for approximately $730 million in cash, adding one of the world’s largest survey-grade aerial imagery programs to its real estate information and analytics platform.
Vexcel captures more than 60 million images annually across millions of square kilometers. Its coverage spans more than 45 countries, 320 major global metropolitan areas, and approximately 99.6% of the U.S. population.
The company generated more than $140 million in revenue during the last 12 months, representing growth of more than 30% from the prior 12-month period, with an adjusted EBITDA margin of approximately 20%.
CoStar plans to combine Vexcel’s high-resolution aerial photography and lidar with its AI capabilities to derive new property information at scale. The company believes the imagery can support tens of billions of additional data fields across the approximately half a billion properties captured by Vexcel.
Potential applications include measurements and semantic data related to land, houses, offices, industrial facilities, retail properties, apartments, construction sites, and other elements of the built environment.
CoStar also expects to use its roughly 2,000-person sales organization to expand Vexcel’s commercial reach while integrating its imagery into products across the company’s real estate marketplaces and information services.
Following the transaction, Vexcel will continue operating under its existing brand and serving its global customers and technology partners. CEO Erik Jorgensen and the current leadership team will remain with the business.
CoStar expects to finance the acquisition using cash on hand and its existing revolving credit facility. The company expects the transaction to be accretive to adjusted earnings per share during the first full year of ownership.
Goldman Sachs served as exclusive financial advisor to CoStar, with Latham & Watkins providing legal counsel. William Blair advised Vexcel, while Snell & Wilmer served as legal counsel.
KEY QUOTES:
“Combining these high-resolution images with the rapidly evolving capabilities of AI to semantically recognize and extract information and features from properties, we believe we can capture hundreds of data fields per property, across the approximately half a billion properties captured by Vexcel.”
Andy Florance, Founder And CEO Of CoStar Group
“By joining CoStar Group, we gain the scale, technology, and resources to broaden our reach, accelerate innovation, and deliver even greater value to customers worldwide.”
Erik Jorgensen, CEO Of Vexcel
