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Zillow to buy StreetEasy for $50 mln, to offer 5 mln Class A shares

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Zillow Inc. (NASDAQ:Z), operator of the largest U.S. real-estate website, agreed to take over New York City startup StreetEasy for $50 million in cash, and announced a secondary stock offering.

StreetEasy, founded 2006, has about 1.2 million monthly unique users, primarily residential real-estate shoppers in the New York region, Seattle, Washington-based Zillow said in a statement today. StreetEasy employs 24 people.

Zillow has been making buyouts to retain growth as it faces competition from Trulia Inc. (NYSE:TRLA) and other real-estate online portals amid housing market recovery. 

"StreetEasy is an incredibly strong and recognized brand in New York City," Zillow Chief Executive Officer Spencer Rascoff said in the statement. It "complements Zillow's dominant and growing national brand." 

Zillow plans a 2.5 million offering of class A common stock and said that an additional 2.52 million of shares will be sold by existing shareholders, the company said in a separate statement today.

Zillow, which reported 61 million unique visitors at the end of July, said it will use the net proceeds of the offering for general corporate purposes, which may include working capital, sales and marketing activities. 

Zillow may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement its business. 

Zillow shares retreated 6 percent to $85.79 at 3:03 p.m. in New York after touching $85.09, the lowest intraday price since Aug. 8. 

The shares have more than tripled this year. The current consensus among 10 investment analysts is to "hold" the stock.

 

Quick facts: Zillow

Price: 56.5 USD

NASDAQ:Z
Market: NASDAQ
Market Cap: $12.48 billion
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