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Asian Major iProperty.com Acquires RealAcres.com as Part of the Rs.18 Crore Asian Expansion Strategy
(2 votes, average: 5.00 out of 5)
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IPGA Limited which runs the iProperty.com group of property websites acquired Indian property major RealAcres (Horizon Infoventures) for a reported AUD 5 million (around 18.8 crores in Indian Rupees). The acquisition of RealAcres.com sees iProperty.com adds to its market-leading online property operations in Singapore, Malaysia, Hong Kong, Taiwan and the Philippines, and represents its latest in a string of acquisitions since its listing on 11 September 2007.
According to their release, the Group has committed to invest over 188 million INR (AUD$5 million) in its Asian expansion and India is a key part of the plan. iProperty.com sees itself continuing to make substantial investments in the Asian region and India will be a prominent part of its future plans. t is expected to invest close to $500,000 over the next 6 months as part of workforce expansion in 3 major metros, in return for 43 per cent stake of Horizon Infoventures in the first stage of the deal.
VCCircle reports that the management and the vendors of RealAcres.com have been retained and have entered into a minimum three year service agreements.
I guess it is obvious to believe Smita Thorat is one happy CEO, though “We sought out a leading Asian group to work with us to take our business to the next level and are excited to now be a part of iProperty.com Group and the iProperty.com network,” all she had to say about the acquisition.
The Growth Sector
What this acquisition strongly suggests is the potential this niche holds, that a lot of people have speculated on since a long time. There is a reason after all that the Indian property market has seen some intense competition from players like MagicBricks, Makaan, 99acres, Indiaproperty.com all of which have powerful media majors backing them. etc. WATBlog had in fact analyzed the Indian property space over a year back and pointed out the immense growth potential in the sector. Interestingly RealAcres was not part of the list that we had surveyed then.
The International Twist
It is interesting to see this news right after 99Acres tied up with US based SecondHome.com to attract foreign property investors looking at India. I wonder, if such an audience is also part of IPGA’s reasons to look at India. So that makes 2 property majors having a tangible international side to their business now, and we are still waiting for Consim, People Interactive and Times Group to make a similar move which seems inevitable at the moment. One might even think the fact that RealAcres doesn’t have a big media house running it being probably a major reason for iProperty to acquire them instead of a tie up with any other.
Consolidation?
We had reported long back on People Interactive Group’s plans to go public and use the capital for acquisitions in online classifieds and communities, by 2009. Now what I wonder is if the plans of acquisitions and the current tie ups lead to a consolidation in the sector. It would be interesting to speculate on the possible alliances and adoptions if that becomes the case. Sanjeev Bikhchandani of InfoEdge had in fact shared his views on acquisitions with Rajiv last month in an interview to WATblog, and is a good read to perhaps gauge an industry leader’s perspective on acquisitions.
WAT wishes the team at RealAcres the best.
Thumbnail courtesy Picture Taker
Strategic Investment makes more sense as compared to VC funding!
Since this investing company is already into the same business worldwide I feel that it will take the majority of the market share in India.
Nevertheless, the competition will be cut-throat
Certainly… the fact that they have a presence abroad and the now rich Indian upper middle and elite classes are looking at investments overseas means these guys can offer a complete asset solution to bait the market. The brand thus built and the huge resources they have will mean serious trouble for the current Indian market players…