Realogy Holdings (formerly Domus Holdings) has the goods for domestic bliss for a lot of people. It is the largest franchisor of residential real estate offices in the world with about 13,600 offices in more than 100 countries. Its brands include Century 21, Coldwell Banker, ERA, Better Homes and Gardens Real Estate, and Sotheby's. In addition to franchising, the company owns and operates about 700 offices under the already mentioned brands along with the Corcoran Group and CitiHabitats labels. It also provides relocation, title, and settlement services, and mortgages. The residential real estate giant changed its name in September 2012 and went public in October.
Realogy in October 2012 raised $1 billion in its IPO, a vote of confidence of sorts in the recovery of the residential real estate market in the US. Realogy used the IPO proceeds to reduce its more than $7 billion in debt. Despite losing $540 million in the two years prior to its IPO, the firm believes the real estate market is poised for recovery. Its strategy includes growing all segments of its business though it offers no specifics on that front.
The US accounts for 98% of New Jersey-based Realogy's revenue. The company's relocation services business is active in the US, Canada, Europe, and Asia.
In addition to its company-owned and franchised real estate brokerages, Realogy is a leading provider of employee relocation services in the US and internationally, serving nearly two-thirds of the Fortune 50 companies.
Realogy reported revenue of $5.3 billion in 2013, an increase of 13% versus 2012. The $617 million jump in sales was driven by rising home sales and home prices across most of the US, which drove results at Realogy's company-owned real estate brokerage services business (up 15% year over year). The real estate franchise services business posted an 14% increase in sales. The company's title and settlement services businesses posted an 11% year-over-year gain, due to higher resale volume, refinancings, and underwriting.
The company posted is first profit in five years in 2013, swinging from a loss of $543 million in 2012 to a profit of $438 million on higher sales and income tax benefits. Cash flow from operations also soared to $492 million in 2013 from negative cash flow of $103 million in 2012.
Beset by flat sales and red ink as the US economy and housing market struggled to recover from the Great Recession, in 2012 the firm undertook various initiatives targeted at reducing costs and enhancing efficiency across the organization. Now with the housing market on the mend, Realogy is growing its real estate brokerage operations through acquisitions.
Mergers and Acquisitions
In July 2014, Realogy Holdings agreed to acquire California-based ZipRealty, a national real estate brokerage and provider to technology and comprehensive online marketing tools to the residential real estate brokerage industry, for $6.75 per share in an all-cash deal valued at $166 million. ZipRealty operates 23 offices in 19 markets across the US.
In 2013 the firm acquired 15 real estate brokerage operations through its wholly-owned NRT subsidiary for total cash consideration of $32 million.