In $235M deal, RE/MAX plans to buy franchising rights for New England, including sites in Maine
One of the world’s largest real estate networks, RE/MAX, has entered into an agreement to buy the franchising rights for New England.
RE/MAX Holdings Inc. (NYSE: RMAX) has agreed to acquire the regional franchising rights for the independent offices across nine states, including Maine, and five Canadian provinces for $235 million, according to a news release Thursday.
Ownership and day-to-day operations of the offices, including those in Maine, will not be affected by the deal.
The brokerages are currently part of RE/MAX Integra, a private, Toronto-based company.
The cash transaction is expected to close in the third quarter of the year, and is being made through RE/MAX LLC, which is controlled by the holding company.
The brokerages and nearly 19,000 real estate agents will remain independent but work under the corporate umbrella of the Denver-based parent. RE/MAX Integra currently works with 2,750 offices and 40,000 agents in over 35 countries, according to its website. Altogether, the RE/MAX network currently includes 140,000 agents in more than 110 countries and territories.
Acquiring independent RE/MAX regional franchises is a “pillar” of the holding company's growth strategy and a capital spending priority, according to the release.
"The addition of these strategic and geographically desirable regions enhances our ability to continue to scale, brings many attractive growth opportunities and simplifies our operational structure by creating greater efficiencies,” said RE/MAX Holdings CEO Adam Contos.
In addition to Maine, franchise regions being acquired by RE/MAX LLC include Connecticut, Indiana, Massachusetts, Minnesota, New Hampshire, Rhode Island, Vermont and Wisconsin. Also part of the deal are offices in the provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island.
Frank Polzler, RE/MAX Integra chairman and co-founder, said, "Our North American regions will be in excellent hands and I have no doubt that this new leadership will build on our foundation and take these regions to even greater heights.”
According to a recent investor presentation, the company stands to more than double revenue flow from agents who work through its own directly franchised brokerages, rather than an independent franchisee.
Since its $220 million initial public offering in 2013, RE/MAX has purchased formerly independent franchises in 14 states and the District of Columbia. In 2020, the company reported revenue of $266 million. It was founded in 1973, forming its name as an acronym for “real estate maximums.”
Shares of RE/MAX were trading at $34.65 late Friday morning, after closing Thursday at $34.38. The company has a market capitalization of $649 million.
Editor's Note: This story has been revised to clarify the RE/MAX franchising relationship.
Most Recent
Most Recent
0 Comments