REAL estate portal REA Group is increasing its interest in Elara Technologies from 13.5% to between 47.2% and 61.1%, gaining majority control in one of India’s fastest growing digital real estate business.
The total consideration for the transaction is expected to be in the range of US$50 – US$70 million.
Elara operates established brands Housing.com, PropTiger.com and Makaan.com.
REA Group CEO Owen Wilson said India is an incredibly attractive market and one that provides excellent long-term growth opportunities, while complementing REA’s footprint in Asia and North America.
“The country is forecast to deliver strong growth over the next decade and continues to experience rapid digital transformation.
“With over 700 million internet users and roughly half a billion yet to come online, our increased investment in Elara will allow REA to be at the forefront of the considerable long-term opportunities within India, and the digitisation of the real estate sector,” he added.
Wilson said since REA’s initial investment in Elara in 2017 the business has delivered strong revenue growth with a compound average growth rate of 42% from FY17 to FY20. After delivering strong revenue growth in the nine months to March FY20, driven by Housing.com, the impact of COVID-19 in Q4 FY20 reduced Elara’s FY20 revenue growth. Full year revenue grew 9% to A$27 million.
“While FY21 revenues are likely to be negatively impacted by the continuing effects of COVID-19, and the duration of the pandemic’s impact remains uncertain, pleasingly Elara’s audience levels continue to reach record highs. In addition, listings volumes have rebounded from the COVID-19 lows in June but remain lower than pre COVID-19 levels,” he continued.
REA expects to fully consolidate Elara’s financial results from 1 December 2020, with REA Group FY21 revenues expected to increase between A$15 – A$20 million, core operating EBITDA (excluding associates) decreasing by A$20 – A$25 million and contribution from associates increasing between A$3 – A$5 million.