Commercial real estate finance company Walker & Dunlop, Inc. (NYSE: WD) will acquire commercial real estate technology company GeoPhy, helping to fast-track growth in Walker & Dunlop’s businesses like Apprise and its small balance lending platform.
Pursuant to the agreement, Walker & Dunlop will acquire GeoPhy for $85 million cash at closing with an additional $205 million of cash earn-out potential structured into phases, a portion of which can be achieved if specific targets within the phase are met.
According to the filings, GeoPhy’s “data analytics and development capabilities will dramatically accelerate the growth of Walker & Dunlop’s lending, brokerage, and emerging businesses including Apprise, its tech-enabled appraisal business and its small balance lending (SBL) platform.” Furthermore, as stated in the press release, the acquisition helps speeds up its Drive to 25 growth strategy, by using technology to scale its businesses and improve its offerings.
“This acquisition is a game-changing investment for Walker & Dunlop, as it dramatically accelerates the growth of our technology capabilities in two areas of the market where we have the ability to disrupt the commercial real estate services industry,” Walker & Dunlop Chairman and CEO Willy Walker said in a press release. “As our current JV partner in Apprise, we are well acquainted with the GeoPhy team and their capabilities. Actionable technology that makes our bankers and brokers more insightful and capable is what has differentiated Walker & Dunlop, and the acquisition of GeoPhy immediately enhances our capabilities.”
GeoPhy’s CEO and Co-founder, Teun van den Dries will continue to lead the GeoPhy team and will lead the Apprise and SBL businesses, while supporting Walker & Dunlop.
“GeoPhy has gained a reputation for its unrivaled capabilities in data science and predictive models, which provide our customers in the commercial real estate space with unmatched efficiencies and insights,” van den Dries said. “As a combined company, we have the scale, resources, and expertise to truly differentiate Walker & Dunlop’s services in the marketplace.”
The deal, announced February 7, is expected to close in Q1 2022.
Walker & Dunlop’s legal advisor is Arnold & Porter Kaye Scholer LLP and Stibbe and its financial advisor is J.P. Morgan Securities LLC. GeoPhy is represented by Wilson Sonsini Goodrich & Rosati and Biesheuvel Jansen Advocaten and its financial advisor is Houlihan Lokey.
Before the announcement, Walker & Dunlop’s stock was valued at $139.18 on February 4. When it was announced on February 7, stock closed at $140.04. A week later on February 14, the stock was valued at $135.94.