Domain has entered into an agreement to acquire property and valuations data provider Insight Data Solutions.
The listed real estate platform has flagged its intentions to buy Insight, as part of a strategy to expand its market beyond realty agents and consumers to financial institutions and the government.
The transaction will reportedly open up Domain’s access to land and property valuations, insights, and analytics services into the government sector and expand the scale of its property data solutions segment.
IDS, which has been running since 2013, focuses its data capabilities on the government and corporate sectors.
Its platform and workflow tools connect a number of stakeholders in the property ecosystem, from the office of the valuer general (who is responsible for statutory valuation processes), to the local government authorities (LGAs) that levy rates based on the valuations and valuers who perform the statutory valuations. It also connects to the public, whose rates are based on the valuations.
Domain chief executive Jason Pellegrino commented Insight Data Solutions (IDS) will bring experience in building property data platforms and delivery services to support the workflow requirements of governments, particularly around land valuations.
“Federal, state and local governments will always play a central role in Australia’s property ecosystem. IDS’ platforms, workflow tools, and property analytics allow governments to make more timely, accurate and nuanced decisions regarding land valuations, land use, tax policy and revenues,” Mr Pellegrino said.
“The importance of these services is likely to amplify as governments deal with increasing land scarcity, the challenges of housing affordability and planning policy, increased infrastructure investment and the transition of revenue from transfer duties to annual levies based on land valuation.”
Domain will pay $60 million upon closing the deal, but the total cost, should IDS achieve its targets over the performance period until June 2027, will amount to $140 million. Should IDS outperform its targets, Domain has said the maximum amount will be $159 million.
IDS is anticipated to deliver revenue of $7 million during the 2022 financial year, with Domain projecting planned growth opportunities will see a more than fourfold increase in revenue in FY26.
In the government segment, the data firm’s VM Online valuation platform manages an estimated 28 per cent of national statutory valuation volume. Domain reported the vast majority of remaining valuation volumes are managed in-house by state VGs.
Meanwhile, its automated valuation model product suite in the corporate side of the business is in use by smaller lenders, fintechs, and mortgage brokers.
“IDS is a strong standalone business and a great addition to our property data solutions pillar,” Mr Pellegrino added.
“Through the acquisition, we can support IDS to keep innovating and expanding into new markets and geographies.”
Under the Domain deal, IDS founders Louie Psaroulis, Mike Thanos, and Chris Spano will remain with the business.
In a joint statement, the IDS founders said Domain’s data assets and industry reach will enable the company to accelerate the evolution of its product offerings.