CoStar pays big premium to buy tech company that creates virtual showings

By Tomi Kilgore

Matterport's stock rockets after CoStar's cash-and-stock buyout deal valued at $1.6 billion

Shares of Matterport Inc. skyrocketed Monday, after the provider of 3D "digital twins" of real-estate properties agreed to be acquired by online real-estate marketplace CoStar Group Inc. in a deal valued at $1.6 billion.

"CoStar Group and Matterport have nearly identical mission statements of digitizing the world's real estate," said CoStar Chief Executive And Florance. "I look forward to welcoming Matterport to the CoStar Group family and believe that we will be stronger together, in pursuit of our common mission."

Under the terms of the deal, Matterport (MTTR) shareholders will receive $2.75 in cash and $2.75 worth of CoStar shares (CSGP) for each Matterport share they own. The $5.50-per-share buyout deal represents a 216% premium to Friday's record-low closing price of $1.74.

Matterport's stock soared 181% in morning trading, closing in on a two-year high - enough to be the biggest gainer on major U.S. exchanges, according to FactSet data. The stock was also headed for its biggest one-day gain since going public in February 2021, surpassing the previous record rally of 25.9% on Nov. 7, 2023.

Meanwhile, CoStar shares rose 1.6%.

The deal is expected to close during the year.

"This transaction is another significant milestone that acknowledges the groundbreaking work Matterport has accomplished in 3D digital twin technology and AI-driven property intelligence," said Matterport Chief Executive RJ Pittman.

California-based Matterport, founded in 2011, creates "digital twins" of properties, using camera technologies, including cameras found on smartphones, so users can take photorealistic virtual tours of properties.

Prior to the deal's announcement, Matterport's stock had tumbled 35.3% year to date through Friday, which CoStar shares had slipped 3.6% and the S&P 500 index SPX had gained 4.1.

-Tomi Kilgore

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04-22-24 1005ET

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