Why PropertyGuru’s $1.1bn deal with EQT Private Capital Asia is making waves

PropertyGuru Group Limited (NYSE: PGRU), Southeast Asia’s foremost property technology (PropTech) company, has announced it is set to be acquired by EQT Private Capital Asia, a branch of the global investment powerhouse EQT AB, in a substantial all-cash deal valued at approximately USD 1.1 billion. This significant move is poised to reshape the landscape of property technology in the region.

Merger Agreement Highlights

The Merger Agreement stipulates that, upon the transaction’s closure, each of PropertyGuru’s outstanding ordinary shares will be converted into USD 6.70 in cash per share. This offer represents a 52% premium over the company’s closing share price on May 21, 2024, which was the last trading day before rumours of the deal began circulating. The cash offer is also notably high, reflecting a 75% premium over the company’s 30-day volume-weighted average share price and an 86% premium over its 90-day average, signalling a significant valuation uplift for shareholders.

Support from Major Shareholders

The merger has received broad backing from PropertyGuru’s major shareholders. TPG Asia VI SF Pte. Ltd. and Epsilon Asia Holdings II Pte. Ltd., the latter managed by global investment firm KKR, hold a combined 56% stake in PropertyGuru. Both entities have committed to supporting the merger through voting and support agreements, reinforcing the deal’s strategic and financial appeal.

Statements from Key Executives

Hari V. Krishnan, CEO and Managing Director of PropertyGuru Group, commented on the merger, stating, “This partnership with EQT marks a transformative chapter for PropertyGuru. The support from TPG and KKR has been instrumental in our journey to becoming Southeast Asia’s leading PropTech platform. EQT’s global expertise in building marketplaces and commitment to sustainable growth aligns with our vision to empower communities across the region.”

Janice Leow, Partner at EQT Private Capital Asia and Head of EQT Private Capital Southeast Asia, expressed confidence in PropertyGuru’s potential, noting, “PropertyGuru’s impressive 17-year track record and its strong foundation in Southeast Asia position it well for future growth. EQT’s extensive experience in technology and marketplace sectors will enhance PropertyGuru’s platform, driving further innovation and engagement.”

Implications of the Acquisition

Upon completion of the acquisition, which is expected in Q4 2024 or Q1 2025, PropertyGuru will no longer be listed on the New York Stock Exchange and will transition to a private entity. The transaction is subject to shareholder approval and regulatory clearances but is not contingent on financing.

PropertyGuru’s headquarters will remain in Singapore, and the company will continue to operate its established portfolio, which includes its flagship property marketplaces, the PropertyGuru Finance mortgage service, and the home services platform Sendhelper. The company is also known for its proprietary solutions under PropertyGuru For Business, such as DataSense and ValueNet.

Advisors Involved

Several prominent financial and legal advisors are involved in the transaction. Moelis & Company LLC is advising PropertyGuru’s special committee on financial matters, while Freshfields Bruckhaus Deringer LLP provides legal counsel. EQT Private Capital Asia is supported by Morgan Stanley Asia (Singapore) Pte. for financial advisory and Ropes & Gray LLP for legal services. KKR and TPG’s advisors include J.P. Morgan Securities Asia Private Limited and Latham & Watkins LLP.

PropertyGuru’s Market Presence

Founded in 2007, PropertyGuru has established itself as a leading player in Southeast Asia’s real estate sector, serving over 28 million property seekers and connecting them with more than 46,000 agents. The company offers over 2.1 million real estate listings and a range of services that provide comprehensive property insights and solutions across Singapore, Malaysia, Thailand, and Vietnam. Its robust growth and market presence underscore the strategic value of the acquisition by EQT Private Capital Asia.