Ryan Schneider, Realogy's CEO and president

MADISON, NJ—SIRVA Worldwide, Inc. of Chicago has reached a definitive agreement to acquire Cartus Relocation from locally-based real estate services firm Realogy Holdings Corp. for $400 million.

SIRVA is a portfolio company of investment funds managed by Madison Dearborn Partners, LLC, a private equity firm based in Chicago.

The transaction, which is expected to close in the first half of 2020, includes all of the relocation assets of Realogy's Cartus subsidiary but does not include the Cartus Affinity business, which delivers home selling and buying assistance to members of affinity clients, nor its Broker Network, made up of agents and brokers from Realogy's residential real estate brands and certain independent real estate brokers. . Under the terms of the agreement, Realogy will receive $375 million in cash at closing, subject to certain adjustments, and a $25-million deferred payment. Realogy states it intends to use a substantial majority of the net proceeds from the transaction, after taxes and transaction and separation-related costs, to pay down corporate debt and use the balance to reinvest in the business.

"The sale of Cartus's Relocation business is part of Realogy's strategy to simplify and streamline our company as we strengthen and hone our value proposition," says Ryan Schneider, Realogy's CEO and president. "This transaction will allow Realogy to retain and focus on growing elements of the business that are critical to our value proposition, including our Affinity and other lead generation partnership programs, which benefit from our established Broker Network. It will also allow us to use net proceeds to reduce debt, reinvest in the business, and drive greater long-term value for our shareholders."

Tom Oberdorf, SIRVA's chairman and CEO, says of the deal, "This acquisition will offer clients broader choice, tremendous program flexibility and a heightened pace of innovation. SIRVA's clients will benefit from access to Cartus's well-established Broker Network, while SIRVA's integrated household goods capacity will benefit Cartus customers. We believe the investments both companies have made in leading-edge technology solutions, exceptional client service delivery and growth will allow us to create the industry's most capable, knowledgeable and accessible relocation management company to best serve our existing and future customers."

Barclays Capital Inc. served as financial advisor to Realogy, and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Realogy. Kirkland & Ellis LLP served as legal advisor to SIRVA.

Realogy also announced on Thursday it generated revenue of $1.6 billion in the third quarter and a net loss of $70 million, driven by a $180-million impairment at NRT, and adjusted net income of $74 million.

"In the third quarter of 2019, we leveraged the strength of Realogy's size, scale and brands to grow our agent base, launch three new high impact products, and introduce two new high-quality lead generation programs," Schneider says. "We are energized by our new products and partnerships, which we believe will win more listings, attract more agents and franchisees, and drive growth."

Charlotte Simonelli, Realogy's EVP, chief financial officer and treasurer, adds, "We delivered Operating EBITDA, generated positive free cash flow, reduced debt, and executed new cost efficiency programs which will generate incremental savings in 2019 and 2020. We are positioning Realogy for improving financial and operational performance and remain resolute in our goal to reduce leverage."

Realogy's affiliated brokerages operate around the world with approximately 190,000 independent sales agents in the United States and approximately 110,400 independent sales agents in 112 other countries and territories.

Instant Insights /

Realogy to Sell Global Relocation Business to SIRVA Worldwide for $400M

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