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Real Estate Investar

Recent Transaction Multiples Highlight Proptech Demand

28 Views08 Apr 2022 08:15
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SUMMARY

PropTech Group (ASX:PTG) is a property technology SaaS company with a fast-growing and market-leading position in customer relationship management (CRM) systems with Australian and New Zealand residential real estate agents, and a small but growing position in the UK market. Industry interest in the proptech sector has been underscored by two recent transactions: Domain Holdings Australia Ltd’s (ASX:DHG) acquisition of real estate campaign management technology platform Realbase for $180m plus an additional up to $50m in earn-out consideration, and Reapit’s acquisition of real estate customer relationship management platform Console Group. The transactions have been completed at an estimated 8.0x forward revenues, which in RaaS’s estimation puts these as the upper end of transaction multiples for privately-held companies. In our view, these transactions highlight the demand for property technology and underscore the value that is being presented in the listed sector, particularly in the small and micro-cap space. We have revisited PropTech’s listed peers and this shows that the listed peer group is trading on an EV/Sales median, based on FY21 revenues, of 9.0x and a forward EV/Sales multiple of 7.4x. PTG is trading at a 59.5% discount to its peers on a forward multiple and at a 62.5% discount to the transactions multiple, underscoring its relative value.

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