Rental Express Group, a privately owned property management business with offices in Qld and WA, has entered into a conditional agreement to buy the RUN Property and Agent Plus businesses for an estimated $65.4 million, it has been announced today.
RUN Property manages around $10 billion in properties in Qld, NSW and Victoria, while administration and accounting software Agent Plus is its fully owned subsidiary. Rental Express is the largest privately owned property management company in Qld, and has two offices in WA.
If the deal proceeds, which is expected by October at the latest, the new entity will manage approximately 20,000 properties in NSW, Victoria, Qld and WA.
Chris Rolls, director at Rental Express, said they had worked closely with RUN Property for a number of years. The deal made sense strategically, he continued, as Rental Express already uses RUN’s software platform, and the placement of its Qld offices fitted in well with where RUN’s were located.
If the deal proceeds, a decision would then be made in relation to the survival of the RUN Property brand. “Details haven’t yet been worked out for branding,” he said.
Staff would likely be largely unaffected if the deal went ahead, Mr Rolls added. “There is unlikely to change for most of them. Yet for those that have potential, it creates more opportunity.”
RUN Property, in a statement, said the deal “provides a promising opportunity for shareholders of RUN to realise the value of the RUN business assets, while at the same time presenting opportunities for RUN’s staff and clients.”
According to the RUN Property Sale Agreement, part of the proceeds will be used to repay RUN’s net bank debt, which is currently $20.4 million.
This debt was refinanced from NAB to Macquarie Bank in February this year.
The deal hinges on Rental Express obtaining finance for the deal, and RUN Property shareholders passing an ordinary resolution authorising the sale. RUN Property also needs to be satisfied with the tax consequences of the deal.
Additional, the statement said the deal is also conditional upon the completion of the Agent Plus sale.
"Since inception, RUN has developed valuable and unique intellectual property, a significant client base and the skills and people to manage and grow a unique property management business," said Rob Farmer, CEO of RUN Corp. "If completed, this transaction provides exciting opportunities for the business and for our people, customers and shareholders."