Re/Max going public as housing stays hot

August 20, 2013: 11:36 AM ET
remax ipo
The real estate brokerage firm Re/Max filed for a $100 million IPO.
NEW YORK (CNNMoney)

Just how hot is the housing market? Re/Max, one of the world's largest real estate brokerage firms, will soon find out.

Re/Max, which has been private since its founding in 1973, filed initial paperwork with the SEC for a $100 million initial public offering.

The real estate brokerage operates as a franchisee with roughly 90,000 agents in more than 90 countries.

But Re/Max is predominantly a U.S. housing company. It noted in its prospectus that 74% of its revenue in 2012 came from the U.S and said it's uniquely poised to take advantage of the continuing U.S. housing recovery.

Related: Housing IPO draws strong demand

Re/Max's competitor Realogy (RLGY), which owns Coldwell Banker and Century 21, tested the IPO waters late last year and has been on fire since then. Its shares are up nearly 60% from its IPO price.

Realogy's shares have soared even as it admitted in its IPO filing that it would use the bulk of its proceed to pay down $4.5 billion in debt from the Apollo Group, which took the company private in 2007.

Like Realogy, Re/Max is partly owned by a private equity fund. But Re/Max's investors -- Weston Presidio -- have not piled much debt on the agency.

Home Depot shows housing boom's for real

Re/Max's founders, husband and wife Gail and Dave Liniger, still own a majority of the company. According to the SEC filing, they will retain a majority of voting control.

Re/Max was hit hard by the real estate bust. Its agent count dropped from 120,000 at its peak to 90,000 currently. The company derives roughly 40% of its revenues from fixed fees that franchisees pay for agents on their staff. The rest comes from a mix of annual dues and fees tied to real estate sales.

Related: A cautiously optimistic take on our bipolar economy

Still, Re/Max managed to return to profitability in the past few years, despite only a modest increase in revenues since 2010. After reporting losses in 2010, profits jumped to $24 million in 2011 and $33 million in 2012.

Another sign of the fiery real estate market: Just this week, the online real estate website Zillow (Z) spent $50 million on the website StreetEasy to bulk up its listings in New York City.

Join the Conversation
Markets
Sponsored by
Index Last Change % Change
Dow 16,979.13 59.54 0.35%
Nasdaq 4,526.48 -1.03 -0.02%
S&P 500 1,986.51 4.91 0.25%
Treasuries 2.43 0.02 0.87%
Data as of 5:06am ET
Company Price Change % Change
Bank of America Corp... 15.52 0.07 0.45%
Apple Inc 100.57 0.04 0.04%
General Electric Co 26.36 0.31 1.19%
Intel Corp 34.50 0.16 0.47%
Staples Inc 11.32 -0.30 -2.62%
Data as of Aug 20
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.25%4.27%
15 yr fixed3.23%3.21%
5/1 ARM3.37%3.37%
30 yr refi4.19%4.36%
15 yr refi3.18%3.17%
View rates in your area
 
Find personalized rates:
Rate data provided
by Bankrate.com