Robert Reffkin (Getty, Securities and Alternate Fee)
On the verge of going public, Compass disclosed it earned $3.7 billion in income final 12 months however misplaced $270 million, in accordance with an investor prospectus it filed Monday.
The IPO submitting, often known as a type S-1, gives the clearest look into the financials of the corporate, which is probably going the fastest-growing U.S. residential brokerage in a era. Compass’ income grew 56 % in 2020 from $2.4 billion in 2019. It lower its losses from $388 million in 2019, and has misplaced a complete of $1.1 billion as of Dec. 31, 2020.
Based in 2012, Compass has 19,000 brokers, and in 2020 turned the third-largest brokerage within the U.S. by deal quantity, in accordance with Actual Developments information, with over $91 billion in 2019 gross sales. The agency has raised $1.5 billion from buyers, together with SoftBank Group, and was final valued at $6.4 billion after a July 2019 funding spherical. Its ascendance has been fueled by a mix of natural development, agent recruitment and a flurry of notable acquisitions. It presently has $440.1 million in money available, the S-1 reveals.
The corporate filed a draft registration assertion with the U.S. Securities and Alternate Fee in early January, as The Actual Deal first reported. The doc it filed in the present day, nevertheless, will present potential public market buyers particulars on its financials, its aggressive panorama and its management.
The doc revealed, for instance, that co-founder Ori Allon left Compass’ board of administrators in February. Allon was beforehand govt chairman; his new title on the agency’s web site is “chief strategist.” Allon holds simply over 1.9 million shares of Class A Widespread Inventory, or about 5.2 % of the general Class A shares issued.
Robert Reffkin, co-founder and CEO, has simply over 860,000 shares of Class A Widespread Inventory, or about 2.4 % of the general Class A shares issued. Reffkin additionally owns greater than 1.5 million shares of Class C frequent inventory, which grant him 20 votes per share.
Different main stockholders embody SoftBank’s Imaginative and prescient Fund, which owns 34.8 % of Class A standard inventory, by subsidiary SVF Excalibur (Cayman) Restricted. Hedge funder Robert Citrone’s Discovery Capital Administration owns 9.2 % of Class A shares.
Buoyed by the recent housing market, Compass mentioned it bought $151.7 billion price of actual property in 2020, in accordance with the S-1. Its transactions have been up 66 % year-over-year. The agency claims it now has about 4 % of the U.S. housing market.
The prospectus additionally cited key authorized battles Compass is going through.
In 2014, the agency was sued by Avi Dorfman, who claims he co-founded Compass however was later lower out of the motion. Compass has known as his go well with “opportunistic.”
Compass can be going through a wide-ranging lawsuit from key rival Realogy, the father or mother firm of the Corcoran Group and Coldwell Banker. The general public actual property large sued in 2019, alleging Compass engaged in illicit enterprise practices and predatory poaching. Compass has defended its actions and sought arbitration within the case, which was denied. This January, Compass sued Realogy, accusing the corporate of waging a “battle of disinformation.”
This can be a creating story. Please examine again for updates.
Erin Hudson contributed reporting.