CoStar to buy Matterport in $1.6 billion deal to boost digital real estate services

(Reuters) -CoStar Group said on Monday it would buy Matterport in a cash-and-stock deal valued at $1.6 billion, as the real estate information provider looks to win listings and sell more properties by enhancing 3D virtual tours.

The deal implies a per-share value of $5.50 and represents a premium of about 216% over Matterport’s last close of $1.74.

Shares of Matterport more than doubled to $4.72 and CoStar Group edged up about 0.8% at $84.90.

Sunnyvale, California-based Matterport, which was founded in 2011, makes 3D cameras for virtual tours of real estate. It also offers a platform that allows users to upload and view the spaces they have scanned.

Matterport’s AI-powered tools help designers and property managers to automate virtual interior design and offer recommendations about optimally using those spaces. The acquisition is likely to help CoStar stave off competition from Zillow Group and Redfin.

“Matterport is the new open house or property tour. People now select their next home, apartment…on their mobile device often without ever visiting the property,” said CoStar CEO Andy Florance.

CoStar’s acquisition of Matterport would bolster its home search platforms, including “Homes.com” and “Apartments.com”.

Matterport has about 440 employees and its 2023 revenue rose 16% from a year earlier to $158 million.

CoStar, which is scheduled to report its first-quarter financial results on Tuesday, said the deal is expected to be completed this year.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Krishna Chandra Eluri)