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Thoma Bravo acquires RealPage as dry powder piles up in real estate tech

Thoma Bravo’s Jason Henry (Credit: WSJ)

Private-equity firm Thoma Bravo has struck a deal to buy property-management-software provider RealPage for $9.6 billion, in one of the largest recent leveraged buyouts, according to the Wall Street Journal. The tech company has grown both organically and through a flurry of acquisitions, completing 12 deals in the past three years.

  • What they do: RealPage provides a technology platform used by owners and managers of rental properties. Tenants might pay their rent or submit a maintenance request using RealPage’s software. The company also keeps a database of real-time lease transactions, allowing it to forecast where markets are heading, the Journal noted.
  • Lots of dry powder still out there: Tishman Speyer formed a $300 million SPAC, or special-purpose acquisition company two months ago. The real estate investor plans on using the blank check company to merge with a proptech company. TS Innovation Acquisitions Corp. will be valued at $375 million following its IPO. CBRE also raised $350 million for a blank check company targeting growth companies.
  • Real Esate SPACS are starting to hit public markets: Shares of OpenDoor (NYSE:IPOB) rose nearly 6% in their debut on Monday after it merged with Social Capital Hedosophia II, SVBZ noted.
  • Old school approach to old problem: Opendoor makes an offer to buy a house within 24 hours of an owner expressing interest online. Although the seller gets less money by foregoing a traditional marketing process, the tech startup offers convenience and certainty. Unlike OpenDoor, WeWork, and Knotel, RealPage is a true software company that benefits from rapid growth without commensurate increased expenses.
  • Be Smart: Software has been among the most resilient sectors during the Covid-19 pandemic as businesses demonstrate that they will keep paying for it even as they cut other costs. [WSJ+SVBZ]

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