Why RealPage Is Acquiring Buildium For $580 Million In Cash

By Amit Chowdhry ● November 8, 2019
  • RealPage announced it is acquiring real estate property management company Buildium for $580 million

RealPage announced it is acquiring Buildium LLC — which is a leading SaaS real estate property management solution provider. And RealPage is expecting to combine its capabilities with Buildium to target smaller multifamily and single-family Associations (HOA and Condo) along with commercial real estate market segments. It is estimated that this market opportunity represents about 50 million units in the U.S.

Buildium is used by over 17,000 customers in over 50 countries with approximately two million residential units under management. And Buildium differentiates itself through its high-quality customer support services and rapid self-provisioning.

RealPage is planning to vastly expand this platform and incorporate “click-on” capabilities that improve the renter leasing and living experience, improve the recovery of utility fees, enhance payment processing capabilities, and expand insurance offerings. And RealPage believes that the applicable revenue per unit can increase significantly as it delivers more value to the SMB market segment.

“The SMB market segment represents a tremendous growth opportunity for RealPage. This is an area where technology is underutilized, 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,” said RealPage CEO and chairman Steve Winn. “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.”

In terms of the numbers, RealPage is buying Buildium for an initial purchase price of $580 million in cash, less any closing and working capital adjustments and a holdback. Buildium generated about $50 million in revenue during the 12 months ended September 30, 2019 with an expected run-rate of approximately $60 million by year-end, representing over 30% year-over-year growth.

Sumeru Equity Partners is the majority owner and lead investor in Buildium.

“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,” added Buildium CEO Chris Litster.

Buildium is the only existing property management solution that also helps real estate portfolio managers easily find new business from property owners and community associations seeking services. Launched in 2004, Buildium services over 17,000 customers in more than 50 countries — which total approximately 2 million residential units under management.

“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,” commented RealPage CFO Tom Ernst.

The completion of this deal is subject to certain standard closing conditions, including regulatory approval — which RealPage anticipates will be satisfied prior to December 31, 2019.