NEW YORK (AP) -- Zillow is buying the New York City-focused real estate website StreetEasy for $50 million to strengthen its foothold in one of the country's most lucrative markets.
StreetEasy, founded in 2006, offers sales and rental listings through partnerships with New York real estate firms. It also provides information about condominiums, co-ops, new developments and luxury real estate.
"StreetEasy is an incredibly strong and recognized brand in New York City, and complements Zillow's dominant and growing national brand," Zillow CEO Spencer Rascoff said in a statement.
The buyout is expected to close in the next few weeks.
Also Monday, Zillow Inc. announced a public offering of 2.5 million shares. Ten of the company's shareholders are selling an additional 2.5 million shares, though the company won't receive any proceeds from the sale of that stock. The offering was priced at $82 per share, below the stock's Monday closing price of $84.74. Zillow shares shed $6.48, or more than 7 percent, during the regular session, then dropped another $1.59 in extended trading.
Zillow's stock had hit a 52-week high of $97.29 earlier this month, just a few days after the Seattle company reported second-quarter adjusted earnings and revenue that topped analyst expectations.
Monday's pricing means Zillow will raise $205 million before paying commission and other fees. The company hasn't specified how it intends to use the money.
The stockholders selling some of their holdings include Zillow Executive Chairman Richard Barton, who will receive nearly $25 million by selling 300,000 company shares, and CEO Spencer Rascoff, who will get about $12 million by selling 146,771 shares, according to a regulatory filing.
Other big windfalls will go to Zillow Vice Chairman Lloyd Frink, who will get nearly $25 million from the sale of 300,000 shares, and venture capital firm Technology Crossover Ventures, which will receive about $123 million from the sale of 1.5 million shares.
Zillow Inc. is giving the underwriters a 30-day option to buy up to an additional 753,522 shares to cover extra demand.
- Investment & Company Information