REA Group has revealed it will be combining its Malaysia and Thailand businesses with PropertyGuru.
An ASX announcement has reported that the property platform has entered into a binding agreement that will see REA transfer ownership of its Malaysian and Thai businesses to PropertyGuru in exchange for an 18 per cent equity interest in PropertyGuru.
Those entities included in the deal are Malaysia’s iProperty.com.my and Brickz.my and Thailand’s thinkofliving.com and Prakard.com.
The transaction will also see REA Group take one seat on the board of the digital proptech company, which operates across Singapore, Vietnam, Malaysia, Thailand and Indonesia.
The group said: “Building on the success of our operations in Malaysia and Thailand, this transaction presents a unique opportunity to create the most compelling digital property classifieds company in Southeast Asia and accelerate the next wave of proptech innovation across the region.”
According to REA Group, the combined businesses will have access to a deeper pool of expertise, technology and investment which will accelerate innovation and provide enhanced digital solutions to home seekers, property agents and developers.
The company’s CEO, Owen Wilson, said the transaction will build on the success of REA Group’s current operations across Malaysia and Thailand.
He said: “This transaction presents a unique opportunity to create the most compelling digital property classifieds company in Southeast Asia and accelerate the next wave of proptech innovation across the region.”
Completion of the transaction is expected to occur in July 2021, but is conditional on REA’s divestment of its 27 per cent interest in 99 Group, operator of 99.co, iProperty.com.sg and rumah123.com.
The ASX announcement said the divestment is well underway and does not need REA shareholder approval.
It’s expected that the transaction will result in an overall gain on divestment of approximately A$10 million.
In FY21, the Malaysia and Thailand businesses are expected to contribute approximately $15 million to REA Group revenue and to reduce EBITDA by approximately $11 million.