Compass is acquiring Alain Pinel Realtors (APR), according to multiple sources who spoke today with Inman and wished to remain anonymous. The acquisition will further Compass’ grip on the San Francisco Bay Area market.
Compass confirmed the acquisition to Inman, in a release, after the story broke.
“Over the last 30 years, Alain Pinel Realtors have become leaders in the Bay Area, known for their luxury offering and strong culture,” Robert Reffkin, Compass CEO said in a statement. “The Hulme family has built a company with the same entrepreneurial, agent-centric values as Compass and I am excited to work together to build the future of the real estate industry.”
A source told Inman that they have heard from a few agents at APR that regular weekly meetings for Tuesday have been canceled. A Compass team also confirmed the move on Twitter. A source told Inman Compass informed its agents of the acquisition on Monday afternoon.
APR would be the second top-10 in transaction volume brokerage that Compass has acquired in the past 12 months, following the Pacific Union acquisition. The Saratoga, California, headquartered brokerage closed more than $12 billion in sales volume in 2017, good for seventh on the Real Trends 500.
“When my family founded Alain Pinel Realtors in 1990, we were committed to transforming real estate and 30 years later, we continue to look for ways to innovate,” Mike Hulme, President of Alain Pinel Realtors said, in a statement. “By partnering with Compass, we are able to further our vision and offer our agents the opportunity to build the future of real estate.”
Compass bolstered its Bay Area presence with the major acquisitions of Pacific Union and Paragon Real Estate in 2018. According to a lawsuit filed by Zephyr Real Estate over Compass’ recruiting practices, the two firms at one time also engaged in talks that would have resulted in Compass acquiring Zephyr Real Estate.
Back in 2018, before the Pacific Union acquisition, a source close to Pacific Union reported that, in June 2018, Compass, after the Paragon acquisition, had 6.5 percent of the market share. The same source said, according to Broker Metrics, Pacific Union had 9.9 percent and APR had 8 percent, meaning.
In September 2018, APR acquired Hill & Co. and its three Bay Area-offices. Hill & Co. brought in $545 million in sales in 2017 and had approximately 100 brokers and agents. At the time of the acquisition, APR President Mike Hulme told Inman that Compass sent APR an email expressing interest in purchasing the company — which APR ignored.
Although financials were not disclosed — both companies are privately held — Reffkin had previously noted that the company pays four to six times a company’s earnings before interest, tax, depreciation and amortization. However, at Inman Connect in New York in January, Reffkin said Compass will be paying less than it has in the past.
“We will have acquisitions this year, but in this environment, where the equity markets are softening … we’re not going to be spending as much last year,” Reffkin said at the invite-only CEO Connect event, clarifying that he means they won’t pay as much for their acquisitions.
Compass acquired Pacific Union International by paying Fidelity National Financial, which owned a 62 percent take in the company, $43 million in cash and an additional $27 million from an earn out if the company meets undisclosed metrics.
Compass, still a privately held company, is said to be valued at $4.4 billion following multiple several hundred million dollar investment rounds. The high-dollar venture capital investments have helped fund Compass’ acquisition-spree and immense growth.
With the acquisition, Compass now says it has north of 10,000 agents. In the Bay Area alone, Compass says it has 3,000 agents across 97 office locations. In California, the company claims to have 4,500 agents.
The company is also using some of that money to double down on technology development and recently acquired Contactually, one of the industry’s top customer relationship management startups.
APR, founded in 1990 by Paul Hulme, currently has approximately 1,400 agents in more than 30 offices throughout Northern California, though it remains to be seen how many of those agents will ultimately join Compass.
In the wake of the Pacific Union acquisition, a number of highly productive agents opted to either not join Compass or find new brokerages to hang their licenses.
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