Scottsdale, Arizona-based SmartRent Inc. (NYSE: SMRT) today announced it acquired Orlando-based apartment management software firm SightPlan Inc. on March 22 for $135 million in an all-cash transaction.
The SightPlan team of about 100 workers will join SmartRent as employees, and SightPlan will continue to run its operations from its Orlando office.
SightPlan’s customer subscriptions are expected to add about $10 million to SmartRent’s SaaS revenue for 2022. Software Equity Group served as the exclusive adviser to SightPlan on the transaction.
“The alignment of our open-API solutions creates a powerful combination for real estate operators,” said Lucas Haldeman, CEO of SmartRent, which provides smart home and smart building automation for residents, property owners, managers, developers and homebuilders.
Founded in 2013, SightPlan products allow apartment operators to manage work requests, communicate with residents, collect rent, oversee inspections and more. Examples of the technology in action include turning mobile devices into digital keys to save time accessing properties, and integration with sensors to alert technicians as soon as an issue with an HVAC system is detected. SightPlan's goal is to reduce liabilities for apartment operators and reduce burdens on employees and residents, SightPlan President Joseph Westlake previously told Orlando Business Journal.
Late last year, SightPlan won city of Orlando approval for economic development incentives for its planned expansion and future creation of high-wage jobs in downtown. A red-hot apartment market drove 36% growth in SightPlan’s staff from 73 people in January 2021 to 100 in August.
Meanwhile, the company adds new apartment community customers every day, Westlake said. “At our growth rate, it could be 2%-3% of the U.S. population by next year interacting with SightPlan technology.”
SightPlan found traction before the pandemic, but skyrocketing demand for apartments this year accelerated its growth trajectory. A tightening labor market makes it tough for apartment operators to hire the help they need, but a digital solution like SightPlan makes existing teams more efficient, Westlake said.
Of course, SightPlan is in a lucrative market. The global property management software sector was worth $2.9 billion in 2020, likely to surpass a $3 billion valuation by 2028, according to market research firm Grand View Research.
SightPlan provides solutions services for more than 160 real estate owners and managers. The company’s offerings are in use at nearly 6,000 properties nationwide. Like SmartRent, SightPlan is led by an experienced team of technology and real estate leaders.
The adoption of technology among property owners and managers is one of the real estate industry's most significant emerging trends, the Urban Land Institute and PricewaterhouseCoopers reported in the 2021 Emerging Trends in Real Estate report. “Significant opportunities to operate and manage buildings more efficiently are ahead. Hundreds of property tech firms are focusing on creating systems to gather, organize and use data to reduce costs, identify risks and more proactively operate buildings; identify appropriate investment strategies; and better serve tenants."
Meanwhile, mergers-and-acquisitions activity has ramped up this year. The global disruption triggered by the Covid-19 pandemic led many companies to review portfolios and reassess strategies, per a mid-year update on global M&A industry trends by New York-based PricewaterhouseCoopers (PwC).
That led to many strategic acquisitions and divestitures as companies redirected money and resources into business divisions and activities with the highest growth potential and where they have a distinctive competitive advantage, the report said.
Digital Producer/Senior Staff Writer Richard Bilbao contributed to this report.
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