CoStar Group to Acquire Domain Holdings Australia in $3 Billion Deal

On May 9, 2025, CoStar Group (NASDAQ: CSGP) announced a binding agreement to acquire Domain Holdings Australia, a major property marketplace, for an enterprise value of approximately A$3.0 billion. CoStar, which already owns 17% of Domain, will acquire the remaining 83% at A$4.43 per share, amounting to roughly A$2.3 billion ($1.5 billion USD) in cash via a Scheme of Arrangement.

The deal has unanimous backing from Domain's board and key shareholder Nine Entertainment, which owns 60.1% of Domain’s outstanding shares. A shareholder vote is expected in mid-August, with closing targeted for Q3 2025, pending regulatory and court approvals.

CoStar CEO Andy Florance stated the acquisition will allow CoStar to expand its marketplace model to Australia, combining Domain’s strong local position with CoStar’s tech and global expertise. Domain Chair Nick Falloon emphasized the compelling value and strategic opportunity the deal presents for shareholders.

CoStar Group Reports 12% Revenue Growth in Q1 2025, Adjusted EBITDA Soars Despite Net Loss

CoStar Group, Inc. (NASDAQ: CSGP) reported first-quarter 2025 revenue of $732 million, reflecting a 12% increase compared to the same period last year. The company posted a net loss of $14.8 million or $0.04 per diluted share, largely driven by $31 million in costs associated with its acquisition of Matterport. However, adjusted EBITDA rose sharply to $65.6 million, a 429% increase from the prior year quarter.

Core commercial platforms continued to deliver robust results, with CoStar and LoopNet showing annualized net new bookings growth of 68% and 200%, respectively. Apartments.com added 4,300 new properties, the highest quarterly addition since 2016. Homes.com expanded its salesforce to 370 representatives and recorded a demo-to-close rate exceeding 50%, the highest in CoStar’s sales history.

The Homes.com network became the second-largest residential platform in the U.S., reaching 104 million monthly unique visitors. Unaided consumer awareness rose to 36%, up from 4% the year before.

For the full year 2025, CoStar expects revenue between $3.115 billion and $3.155 billion and adjusted EBITDA in the range of $355 million to $385 million. Q2 revenue is projected between $770 million and $775 million, with adjusted EBITDA guidance of $50 million to $60 million.

Summary of CoStar Group’s CCRSI (Commercial Repeat Sale Indices):

Commercial real estate pricing trends through March 2025 were mixed across property types and regions. The value-weighted U.S. Composite Index rose 0.7% month-over-month and 3.6% year-over-year but remained 18% below its July 2022 peak. The equal-weighted U.S. Composite Index climbed 1.4% over the prior month and 1.5% year-over-year, slightly above its previous all-time high. Investment-grade properties saw a 2.4% price decline compared to last year, while general commercial properties gained 2%. Transaction volumes strengthened, with investment-grade sales increasing 17.9% compared to March 2024.

Regionally, price movements varied. In the West, multifamily prices fell 6.1% year-over-year, while Northeast industrial prices rose 12.1%. Retail prices mostly increased across regions, while office property prices showed resilience in some markets despite sharp declines from previous highs. Distressed sales remained relatively low at 3.4% of repeat sales. Industrial and multifamily sectors showed the most notable mixed trends, with land prices notably jumping 4.5% in the first quarter.

CoStar Group adds new independent directors and forms capital allocation committee under agreements with D. E. Shaw and Third Point

CoStar Group, Inc. (NASDAQ: CSGP) announced the appointment of three new independent directors—Christine M. McCarthy, John Berisford, and Rachel C. Glaser—to its Board of Directors following agreements with major shareholders D. E. Shaw and Third Point. These appointments are part of broader governance initiatives, including the creation of a new capital allocation committee.

Key highlights:

- New appointments: McCarthy, Berisford, and Glaser joined the Board on April 6, 2025. McCarthy and Berisford were also appointed to the newly formed Capital Allocation Committee.

- Departures: Michael R. Klein (Chairman), Christopher J. Nassetta, and Laura C. Kaplan resigned from the Board. Louise S. Sams was appointed as the new Chairperson.

- Governance agreements: Under the terms of support agreements with D. E. Shaw and Third Point, the firms will support the new appointees and agree to a standstill period through mid-2026, during which they will refrain from activism and vote in line with Board recommendations.

- Capital Allocation Committee: Chaired by CEO Andrew Florance, the new committee will advise on capital structure, financial targets, and strategic investments across CoStar's portfolio, including Apartments.com, LoopNet, and Homes.com.

- Board compensation: New directors will receive a $50,000 annual cash retainer and a $250,000 restricted stock award vesting over four years.

CoStar emphasized that these steps support its strategic priorities and reflect a continued commitment to shareholder alignment and long-term value creation.

CoStar Group, Inc. filed a Form 8-K on February 28, 2025, announcing the completion of its acquisition of Matterport, Inc. The transaction was executed under the Agreement and Plan of Merger and Reorganization dated April 21, 2024. The acquisition was completed through a two-step merger process in which Matterport first merged with a wholly-owned subsidiary of CoStar Group and then merged into another CoStar subsidiary.

Under the terms of the merger agreement, each outstanding share of Matterport Class A common stock was converted into 0.03552 shares of CoStar Group common stock and $2.75 in cash per share. The exchange ratio was determined based on the volume-weighted average price of CoStar shares over 20 trading days before the merger was finalized. Fractional shares were settled in cash.

Following the completion of the merger, CoStar Group issued a press release announcing the transaction, which is attached as an exhibit to the filing.

CoStar Group reported strong financial performance for 2024, with total revenue increasing 11% year over year to $2.74 billion. Fourth-quarter revenue rose 11% to $709 million. Net income for the year was $139 million, while Q4 net income reached $60 million. Adjusted EBITDA grew 47% from the previous quarter, reflecting continued profitability.

Apartments.com generated $1.07 billion in revenue, growing 17% year over year, while CoStar's flagship commercial real estate platform achieved $1.02 billion in revenue, up 10%. The company’s commercial information and marketplace brands maintained a 43% profit margin. The total number of monthly unique visitors across CoStar’s platforms increased 17% year over year to 134 million in Q4.

Homes.com emerged as the second-largest residential real estate marketplace in the U.S., reaching an average of 110 million monthly unique visitors in Q4—nearly double Realtor.com’s 62 million. The platform has helped real estate agents gain greater listing exposure and increase sales efficiency.

The Board of Directors approved a $500 million stock repurchase program, which has no time limit and can be discontinued at the company’s discretion. CEO Andy Florance emphasized CoStar’s long-standing double-digit revenue growth, strong profitability, and the success of Homes.com in reshaping the residential real estate market.