Compass is nearing a deal to acquire Pacific Union International, sources close to the transaction confirmed to Inman.
One source said senior leaders of Pacific Union were notified Monday about the transaction and it will be publicly announced Thursday.
Pacific Union International is ranked No. 5 by sales volume, according to the 2018 RealTrends 500 list with more than $14 billion in annual sales. The California indie brokerage boasts 54 offices and 1,700 agents throughout the state, which would give Compass a major foothold not only in the San Francisco Bay Area, but also in the Los Angeles area.
Pacific Union CEO Mark McLaughlin has been a fierce critic of Compass. Publicly, Pacific Union has not been shy at taking public jabs at Compass for the launch of its commercial division and its claims of market share.
One Pacific Union insider said, “I thought Mark would roll over in his grave before doing business with Compass.”
Fidelity National Financial owns a controlling interest in Pacific Union.
Don’t wait for another downturn: recession-proof your business today
Tom Ferry’s tips to dominate – even in a changing marketplace READ MORE
Inman obtained a copy of an email sent on August 5 from Iris Lichtman, assistant general counsel at Compass to McLaughlin, in which Lichtman included an updated due diligence request list – a document that a potential investor uses to examine a business it’s interested in investing in or acquiring. The email confirms that discussions have been taking place since at least August 5.
Compass’s growth has exploded since it received $550 million in venture capital funding late last year. Just last week, the company announced it would be partnering with Avenue Properties in Seattle and rebranding its offices as Compass Seattle offices.
In July, Compass acquired Paragon Realty Group, which closed more than $2 billion in annual sales, according to the Real Trends 500.
Compass, founded in 2012 in New York City by Robert Reffkin and Ori Allon, has opened offices in a number of new markets this year, including: Seattle, Philadelphia, Naples, San Diego, Tahoe, Dallas. Compass has further acquired Conlon Real Estate and The Hudson Company, both in Chicago; P.S. Platinum in San Diego and ICS Realty in Aventura, Florida, in addition to the others already mentioned.
The publicly stated goal of the company is to achieve 20 percent market share in the top 20 markets by 2020. With Pacific Union International, Compass is much closer to that goal. Data from Broker Metrics, which Pacific Union shared with Inman last month, showed Pacific Union had 9.9 percent market share in the Bay Area while Compass/Paragon Real Estate had 6.5 percent market share.
Multiple requests for comment to Compass and Pacific Union went unreturned. Compass employees are attending an all-employee retreat this week.
Developing…
Source: click here
Loading ...