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February 21, 2024

Domain is acquiring a new real estate platform so property really is hot property RN

Domain, home of your fave multimillion-dollar listings, is acquiring a new real estate platform, but there's a twist.

What's the key learning?

  • This deal includes an earnout, allowing Realbase (the seller) to earn additional $$$ if they hit certain targets.
  • Earnouts help motivate sellers to keep putting in 100%, because if they do they can get that bread!

๐Ÿ‘‰ Background: Domain is the real estate site owned by Nine Entertainment. Ya know, the one that you spend hours on browsing Sydney's multimillion-dollar listings?

๐Ÿ‘‰ What happened: Domain is set to acquire a company called Realbase to broaden its offering to real estate agents. This crew are the largest campaign management platform in Oz and NZ.

๐Ÿ‘‰ What else: Domain says it'll fork out $180 million upfront, plus up to $50 million in earnouts.

๐Ÿ””What's the key learning?

๐Ÿ’กAn earnout allows the seller of a business to earn additional compensation in the future if it hits certain targets.

๐Ÿ’ก For the acquirer (aka Domain), it incentivises the seller to keep working hard and hitting goals, 'cos if they do, they get more cash!

๐Ÿ’ก Earnout terms are set on a case-by-case basis, but in this case Domain hopes Realbase continues on its merry way of performing well post-acquisition.

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