Madison-based Realogy Holdings Corp., the largest full-service residential real estate services company in the United States, and SIRVA Worldwide, Inc., a subsidiary of SIRVA, Inc., a leading global relocation and moving service provider, announced a definitive agreement under which SIRVA will acquire Realogy’s global Cartus Relocation business. The transaction is valued at $400 million, and is expected to close in the first half of 2020, subject to the receipt of required regulatory clearances and other closing conditions. SIRVA is a portfolio company of investment funds managed by Madison Dearborn Partners, LLC (MDP), a leading private equity firm based in Chicago.
The transaction includes all of the Relocation assets of Realogy’s Cartus subsidiary but does not include the Cartus Affinity business, which delivers home selling and buying assistance to members of affinity clients, nor its Broker Network, made up of expert agents and brokers from Realogy’s residential real estate brands and certain independent real estate brokers. Affinity complements Realogy’s core business, which includes both franchise and owned residential real estate brokerage companies as well as title and settlement services.
Under the terms of the agreement, Realogy will receive $375 million in cash at closing, subject to certain adjustments, and a $25 million deferred payment. Realogy intends to use a substantial majority of the net proceeds from the transaction, after taxes and transaction and separation-related costs, to pay down corporate debt and use the balance to reinvest in the business.
“The sale of Cartus’s Relocation business is part of Realogy’s strategy to simplify and streamline our company as we strengthen and hone our value proposition,” said Ryan Schneider, Realogy’s chief executive officer and president. “This transaction will allow Realogy to retain and focus on growing elements of the business that are critical to our value proposition, including our Affinity and other lead generation partnership programs, which benefit from our established Broker Network. It will also allow us to use net proceeds to reduce debt, reinvest in the business, and drive greater long-term value for our shareholders.”
“This acquisition will offer clients broader choice, tremendous program flexibility and a heightened pace of innovation,” said Tom Oberdorf, SIRVA’s chairman and CEO. “SIRVA’s clients will benefit from access to Cartus’s well-established Broker Network, while SIRVA’s integrated household goods capacity will benefit Cartus customers. We believe the investments both companies have made in leading-edge technology solutions, exceptional client service delivery and growth will allow us to create the industry’s most capable, knowledgeable and accessible relocation management company to best serve our existing and future customers.”
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