Published August 19, 2013
Re/Max Holdings, a real-estate franchise operator, filed on Monday for an initial public offering of up to $100 million, another sign of growing optimism over the U.S. housing market.
The company boasts that its agents have sold the most real estate in the U.S. and Canada every year since 1997. Revenue has remained fairly steady the last three years, although profits drastically improved. In the first half of this year, revenue rose sharply while core earnings growth fell amid higher costs.
“With approximately 74% of our 2012 revenue coming from the U.S., we believe that we are well positioned to benefit from a continuing recovery in the U.S. housing market,” Re/Max said in its filing with the Securities and Exchange Commission.
The franchise operator also owns regional franchises that account for 46% of the roughly 92,000 Re/Max agents. Re/Max saw its agent count decline during the economic downturn, but the company said growth in agent numbers is accelerating this year after an increase in 2012.
The company indicated that $27.3 million of the proceeds from the offering will be used to buy more regional rights in the central Atlantic and southwestern regions of the U.S. The move would bring Re/Max’s share of agents to 54% of its total U.S. and Canada agent count.
The remaining proceeds will go toward buying shares in RMCO LLC. Re/Max, whose major shareholders include co-founders and executives Dave and Gail Liniger, will act as the sole manager, operator and controller of RMCO.
Denver-based Re/Max, which will now be incorporated in Delaware, will trade on the New York Stock Exchange under the symbol RMAX.