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  • REA Group (REA) is set to back Singaporean online real estate company PropertyGuru’s merger with blank-cheque company Bridgetown 2 Holdings
  • Upon closing of the transaction, the combined company is expected to begin trading on the New York Stock Exchange 
  • In May, REA traded its Malaysia and Thailand businesses with PropertyGuru for an 18 per cent stake in the company
  • The combined merged company will have an equity value of around US$1.78 billion (A$2.41 billion)
  • REA Group has also committed to an additional US$32 million (A$43.5 million) investment
  • Shares in REA are up 0.04 per cent to sit at $162.61

REA Group (REA) is set to back Singaporean online real estate company PropertyGuru’s merger with blank-cheque company Bridgetown 2 Holdings in a deal that will see the company go public on the New York Stock Exchange.

In May, REA traded its Malaysia and Thailand businesses with PropertyGuru for an 18 per cent stake in the company, with the acquisition expected to be settled by mid-August.

At closure, the merged company’s combined enterprise value will be roughly US$1.35 billion (A$1.83 billion), with an equity value of around US$1.78 billion (A$2.41 billion).

The special-purpose acquisition company, Bridgetown 2 Holdings, is backed by billionaires Richard Li and Peter Thiel and hopes to accelerate Property Guru’s growth in Southeast Asia.

PropertyGuru, which is backed by REA Group, TPG Capital and KKR, has profited from a pandemic-induced real estate surge in Singapore, which has driven house prices to new highs.

The aforementioned shareholders will own more than 70 per cent of the publicly traded company.

Founded in 2007, Property Guru has evolved to become one of Southeast Asia’s top digital property marketplaces, with over 2.8 million monthly real estate listings hosted by the company.

It serves 37 million monthly property searchers and 49,000 active property agents in Southeast Asia’s five major countries – Indonesia, Malaysia, Singapore, Thailand, and Vietnam.

The transaction is expected to generate gross proceeds of up to US$431 million (A$585 million) from the contribution of up to US$299 million (A$406 million) in cash held in Bridgetown 2’s trust account.

A concurrent US$100 million (A$136 million) private placement (PIPE) of common stock anchored investors including Baillie Gifford, Naya, REA Group, Akaris Global Partners will also add to the proceeds.

REA Group has also committed to an additional US$32 million (A$43.5 million) investment.

KKR, TPG Group, and REA Group will each invest 100 per cent of their shares in the merged firm, indicating their continuing support for the company’s growth strategy.

The market for property is probably the oldest market in the world, and only now is it beginning to change rapidly,” Thiel Capital president Peter Thiel said.

“As PropertyGuru spearheads that change in Southeast Asia, Bridgetown 2 will provide capital and expertise to accelerate it even further.”

Subject to regulatory and shareholder approvals, as well as other customary closing conditions, the deal is expected to conclude in the fourth quarter of 2021 or the first quarter of 2022.

Shares in REA were up 0.04 per cent to sit at $162.61 at 2:00 pm AEST.

REA by the numbers
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