mid-cap

REA Group Rocketing High

Apr 26, 2016 | Team Kalkine

Read Time :5 MINS

REA Group Limited
Industry: Consumer Discretionary

REA Details

Acquisition of Flatmates.com: REA Group Limited (ASX: REA) stock surged over 3.76% on April 26, 2016 on news of the group’s 100% acquisition of Flatmates.com.au which is a leading player for share accommodation in Australia. REA has been aggressively expanding its international position and this acquisition would further boost its domestic as well as international expansion. The group is considering the acquisition for $25 million plus potential earn out payments for the next two years based on Flatmates financial performance. Flatmates site gets an average of 2.6 million visits and around 9 million flatmate searches monthly while REA intends to leverage the booming share accommodation segment in the Australia wherein the traffic rose by around 50% on a year over year basis.
Recommendation: We maintain our “HOLD” recommendation on REA at the current price of $52.04

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Mid-Cap