Altus Strengthens CRE Data and Analytics Capabilities Through Acquisition of Reonomy
TORONTO, Nov. 11, 2021 (GLOBE NEWSWIRE) — Altus Group Limited (TSX: AIF) (the “Company” or “Altus”), a leading provider of software, data solutions and independent advisory services to the global commercial real estate (“CRE”) industry, announced today that it has signed a definitive agreement to acquire Scryer, Inc. (dba Reonomy) (“Reonomy”), a fast growing, AI-powered data platform for the CRE industry, for US$201.5 million (approximately C$249.5 million), (on a cash-free/debt-free basis) subject to adjustments. The transaction is expected to close on November 12, 2021.
Mike Gordon, Chief Executive Officer of Altus Group said:
“The combination of Reonomy’s AI-powered data platform with Altus’ suite of software, data and analytics capabilities creates a very compelling client offering that will enable our clients to better manage performance and risk within their CRE portfolios with data-driven insights, predictive analytics and alert capabilities. It significantly accelerates our transformative innovation in AI predictive data analytics by better positioning us technologically, with data science and analytics expertise, and with a robust dataset to add analytics into workflows that not only look back at what happened and why, but look forward to machine learning informing us on what might happen next.”
- Accelerates, Altus’ innovation and data strategy to solve key CRE challenges with real-time data-driven insights, predictive analytics and alert capabilities.
- Expands Altus’ CRE data and analytics capabilities with complementary and synergistic offerings which can be scaled globally while having the potential to substantially increase the Company’s total addressable market.
- Enhances Altus’ growth profile with strengthened cross-sell opportunities and prospects to serve new and expanded customer use cases.
- Strengthens data science and analytics expertise with Reonomy’s highly talented team that has a strong cultural fit with Altus, providing Altus and Reonomy employees with expanded opportunities for career development and growth.
- Immediately improves the Company’s recurring revenue profile with fast-growing subscription revenues. (Reonomy’s annual recurring revenue forecast for 2021 is expected to be US$21 million by year end.)
- Presents attractive revenue, cost and cost avoidance synergies related to the Company’s ongoing data strategy initiatives and significantly accelerates time to market on numerous product roadmap initiatives underway.
Founded in 2013, Reonomy is a leading U.S. CRE data and analytics provider leveraging artificial intelligence and machine learning technologies to empower real estate industry professionals with data-driven insights and solutions to gain comprehensive market knowledge, discover opportunities, and automate workflows.
Reonomy’s AI-powered data platform connects disparate property information by leveraging vast data sources, including multiple public and proprietary data feeds, together with AI machine learning to aggregate market intelligence on commercial properties across the U.S., including assessor, census, transaction, geospatial, ownership and occupant data. Using AI machine learning and proprietary entity resolution capabilities, Reonomy then links all the data sources for every commercial asset with a single unique identifier (Reonomy ID). The resulting dataset is an industry-leading collection of insights across more than 52 million tax parcels and over 38 million commercial properties, accounting for nearly all of the commercial inventory in the U.S. Reonomy’s team of approximately 115 professionals will be integrated with the Company’s Altus Analytics business.
Richard Sarkis, Executive Chairman and Co-Founder of Reonomy said:
“I co-founded Reonomy with a very direct mission to solve a pressing pain-point in the CRE industry – to connect data and bring greater transparency to the CRE market at a time when credible information on this significant asset class was still scarce. Altus Group shares in our mission and has played a pivotal role in advancing the transformation of the CRE industry. We are very excited about the opportunities that joining Altus Group will bring and how it paves the way for continued innovation. Leveraging Altus’ unique position in the CRE value chain with our data and analytics capabilities is exceptionally powerful and I’m confident that together we will create considerable value for our industry and combined stakeholders.”
Jorge Blanco, Chief Product Officer of Altus Group, added:
“Together, we will be able to provide leading-edge insights and analytics in a new and innovative manner. The Reonomy team has done an exceptional job leveraging AI machine learning to solve key data management challenges in the CRE industry and unveil hidden data relationships. Integrating Reonomy’s data and technical capabilities with our recently acquired StratoDem Analytics platform for predictive analytics will enable us to deliver analytics at scale, and when integrated together with our foundational ARGUS software solutions, will be transformative for the CRE industry. Our clients will be able to gain deep insights on their CRE assets in a way that’s never been done before.”
Reonomy’s trailing twelve-month to September 30, 2021 revenues were US$18.3 million and Reonomy had an Adjusted EBITDA loss of US$16.9 million reflecting its investment focus on user growth, platform development and revenue acceleration. Substantially all of Reonomy’s revenues are recurring, consistent with Altus Group’s Over Time revenue definition. Management anticipates that with the anticipated synergies, the impact of Reonomy on Altus’ Adjusted EBITDA for 2022 will be nominal. The acquisition is expected to be accretive to Altus’ Adjusted EBITDA in 2023. In addition, as required by IFRS, Altus Group expects to have an accounting adjustment on Reonomy’s deferred revenues. Notwithstanding Reonomy’s impact to the Altus Analytics’ Adjusted EBITDA in 2022, Management continues to expect a year-over-year improvement in Altus Analytics Adjusted EBITDA margins for full year 2022.
On closing, Altus will pay US$198.5 million (approximately C$245.8 million) in cash, funded by cash on hand and borrowings under the Company’s credit facilities. In addition, Altus will issue common shares from treasury to Reonomy employees valued at US$3.0 million (approximately C$3.7 million). These common shares will be subject to restrictions and will vest in equal installments on the first and second anniversaries of the issuance date. With this transaction, the Company’s funded debt to Adjusted EBITDA leverage ratio is expected to increase to approximately 3.0x. Given the expected synergies and existing strong cash flows, Altus expects to de-lever to a funded debt to EBITDA leverage ratio in the low 2.0x range by the end of 2022.
Conference Call Details
The Company will hold a conference call today, November 11, 2021, at 5:00 pm ET to discuss its third quarter 2021 results and the details of this transaction. A replay of the webcast will be made available on Altus Group’s Investor Relations section of its website.
|Date:||Thursday, November 11, 2021|
|Time:||5:00 p.m. (ET)|
|Webcast:||altusgroup.com (under Investor Relations)|
|Live Call:||1-800-319-4610 (toll-free North America) or 416-915-3239 (Toronto area)|
|Replay:||available via webcast at www.altusgroup.com/company/investor-relations|
About Altus Group Limited
Altus Group Limited is a leading provider of software, data solutions and independent advisory services to the global commercial real estate industry. Our businesses, Altus Analytics and Altus Commercial Real Estate Consulting, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,600 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include many of the world’s largest commercial real estate industry participants. Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the Toronto Stock Exchange under the symbol AIF. For more information on Altus Group, please visit: www.altusgroup.com.
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