FTC Moves to Block CoStar Acquisition of RentPath
The US Federal Trade Commission has authorized a federal lawsuit against CoStar's plan to acquire RentPath Holdings. From a Wall Street Journal article about the move:
The Federal Trade Commission last week authorized a federal lawsuit against CoStar’s plan to acquire RentPath Holdings Inc. for $587.5 million, which the company announced in February. CoStar already owns Apartments.com which, like RentPath, is a big player in the online market for apartment listings.
“The proposed acquisition is likely to lead to anticompetitive effects,” states the Commission complaint.
In a written statement responding to the FTC, CoStar Chief Executive Andrew Florance questioned whether RentPath was still a major market force, given that it is operating under chapter 11 bankruptcy protection. RentPath’s owners, private-equity firms TPG Capital and Providence Equity, took the company into bankruptcy at the same time the proposed sale to CoStar was announced...
CoStar got into the rental apartment business in 2014 by acquiring Apartments.com for $585 million. Since then, it has grown the business by buying ForRent.com and other internet sites. Last year, the multifamily business made up $490.6 million of CoStar’s $1.4 billion in revenues.