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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 10, 2000
Date of Report (Date of earliest event reported)
Commission File Number 000-24531
COSTAR GROUP, INC.
(Exact name of Registrant as specified in its charter)
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Delaware 52-2091509
(State or other jurisdiction of incorporation (IRS Employer Identification Number)
or organization)
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7475 Wisconsin Ave., Suite 600
Bethesda, Maryland 20814
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (301) 215-8300
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 10, 2000, CoStar Group, Inc. ("CoStar") completed the
acquisition of COMPS.COM, Inc. ("COMPS") under a merger agreement, dated as of
November 3, 1999, among Costar, COMPS and Acq Sub, Inc. ("Acq Sub"), a
wholly-owned subsidiary of CoStar. COMPS' primary asset is a database of
commercial real estate sales information. In connection with the transaction,
COMPS was merged with and into Acq Sub, which was the surviving corporation in
the merger. Immediately after the merger, Acq Sub changed its name to Comps,
Inc. The merger agreement provided for each share of COMPS common stock to
receive either $7.50 in cash or 0.31496 shares of CoStar common stock, subject
to adjustment to ensure that 50.1% of the COMPS shares received Costar common
stock and 49.9% of the COMPS shares received cash. The aggregate consideration
included:
- $49,015,905 in cash paid to former holders of COMPS common stock
(excluding cash paid for fractional shares); and
- 2,258,738 shares of CoStar common stock (including shares issued to
former warrantholders of COMPS).
The cash portion of the purchase price was obtained by CoStar from the proceeds
from the sale of its common stock in a public offering in May 1999.
The merger consideration was determined in arms' length negotiations
between the parties to the merger agreement. Before the consummation of the
merger, no material relationships existed between COMPS and its officers,
directors, affiliates, associates or stockholders and CoStar and its officers,
directors, affiliates, associates or stockholders.
No other information is provided herewith regarding the merger as CoStar
has "previously reported" (as defined in Rule 12b-2) substantially the same
information regarding the merger including the related historical and pro forma
financial information, as is required by Form 8-K, in its Registration Statement
on Form S-4, as amended, filed on January 5, 2000 (Registration No. 333-92579).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
No financial statements are included herewith as such financial
statements have previously been reported. See Item 2 above.
(b) Pro forma financial information
No financial statements are included herewith as such financial
statements have previously been reported. See Item 2 above.
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(c) Exhibits:
Exhibit No. Description
2.1 *Definitive Agreement and Plan of Merger, by and among CoStar
Group, Inc., COMPS.COM, Inc., and Acq Sub, Inc., dated as of
November 3, 1999.
99.1 Press Release issued by CoStar Group, Inc. on February 11, 2000.
99.2 Press Release issued by CoStar Group, Inc. on February 15, 2000.
* Filed as part of CoStar's Current Report on Form 8-K, filed November 17, 1999,
and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
COSTAR GROUP, INC.
Dated: February 24, 2000
By: /s/ Frank A. Carchedi
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Frank A. Carchedi
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
Number Description Location
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2.1 Definitive Agreement and Plan of Merger, by Incorporated by reference from Exhibit
and among CoStar Group, Inc., COMPS.COM, 2.1 to Form 8-K filed with the
Inc., and Acq Sub, Inc., dated as of Commission on November 17, under
November 3, 1999 Securities1999 located and Exchange
Commission Files No. 0-24531
99.1 Press Release issued by CoStar Group, Filed herewith
Inc. on February 11, 2000
99.2 Press Release issued by CoStar Group, Filed herewith
Inc. on February 15, 2000
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Exhibit 99.1
COSTAR GROUP COMPLETES ACQUISITION OF COMPS.COM
COMBINATION CREATES THE LARGEST SOURCE FOR COMMERCIAL REAL ESTATE INFORMATION ON
THE INTERNET
February 11, 2000
BETHESDA, MD -- CoStar Group, Inc. (CoStar) (Nasdaq: CSGP) announced it has
completed the acquisition of COMPS.COM, as part of its larger strategy for the
creation of CoStar Exchange(TM) -- a unified, robust, and unbiased Internet
marketplace for commercial real estate. The addition of COMPS.COM's content and
research capabilities creates the largest source for independent and comparable
data on commercial real estate, unique to CoStar Group, continuously assembled
and updated by over 700 professional researchers.
This broker-centric model will enable sellers to reach a larger and more
qualified universe of buyers, and will enable buyers to more quickly and
effectively find and evaluate commercial properties for sale by instantly
referencing correlating Web-based information. CoStar Exchange(TM) will feature
properties for sale, including correlating content on comparable sales,
for-lease space availability, commercial real estate inventory and market
statistics, tenant information, and an image library of building photographs,
floor plans, aerials, and maps. It will also include background information on
buyers, sellers, lenders, owners, principals and service providers.
"The acquisition of COMPS.COM is key to our vision of creating an unequaled,
central source of comprehensive and comparable information so our customers can
do what they do best -- serve their clients and close the deals," said CoStar
CEO Andrew Florance. "Just as Nasdaq fueled the growth of OTC stocks by creating
an environment of knowledge and trust, so will information delivered on CoStar
Exchange(TM), verified by the most trusted research team in the industry, fuel
the growth of commercial real estate."
The acquisition of COMPS.COM significantly increases the resources of CoStar,
enlarging its database of new properties by 397,000 to more than 718,000 in 47
markets nationwide. The acquisition will also boost CoStar's database of
properties for sale to 40,000 with an aggregate value exceeding $40 billion. In
addition, more than 490,000 sales transactions will be tracked and 660,000
digital images stored. Through the acquisition of COMPS, CoStar will add a
significant number of properties in other major commercial property types, such
as retail, multi-family, and hospitality, to the company's existing database.
The combined companies, which will operate under the CoStar name, will offer a
wide range of products and services to support the sale, purchase and leasing of
commercial real estate. The former COMPS.COM will now operate as a wholly-owned
subsidiary of CoStar Group, under the name Comps, Inc. Following the
acquisition, COMPS.COM's product lines will be integrated into the CoStar family
of products and become known as CoStar COMPS.
Additionally, CoStar has formed a new management team to hone COMPS.COM's
product lines and streamline its resources to align with the parent company's
vision. Florance will serve as President of Comps, Inc., while Craig Farrington,
former COMPS.COM Senior Vice President, will serve as the subsidiary's COO.
Christopher Crane, current chairman and CEO, and CFO Karen Goodrum are leaving
the company effective immediately.
"We have seen CoStar's vision for a central national marketplace on the
Internet, and we are excited to be a part of it," said Farrington. "Andy is one
of the most visionary and respected innovators in the commercial real estate
industry. He sees CoStar Exchange(TM) as the best and most comprehensive way to
serve your customers -- and we agree."
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Exhibit 99.1
CoStar paid approximately $50 million in cash and issued approximately 2.2
million CoStar shares to the former COMPS.COM shareholders in connection with
the merger. At September 30th, 1999, COMPS.COM reported net tangible assets of
$46 million, which were principally cash, thereby effectively reducing the
overall purchase price.
This news release includes certain "forward-looking statements," which involve
many risks and uncertainties that could cause actual results to differ
materially from such statements. If CoStar is not able to integrate the
operations of COMPS on a timely and cost effective basis, then the merger may
not be successful. This could occur for a number of reasons, including errors in
planning, delays in implementing the integration and unexpected events in the
markets in which CoStar operates. In addition, there can be no assurances that
CoStar will launch CoStar Exchange or that CoStar Exchange will be successful.
Important factors that could cause actual results to differ materially include,
but are not limited to, those listed in CoStar Group's Registration Statement on
form S-1, filed March 24, 1999, and CoStar's Registration Statement on Form S-4,
filed on December 10, 1999.
SOURCE CoStar Group, Inc.
CONTACT: Meredith Leyva of Fleishman Hillard, 202-421-6214. for CoStar Group,
Inc./
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Exhibit 99.2
COSTAR ANNOUNCES EXCHANGE RATIOS FOR COMPS.COM STOCK
BETHESDA, Md., Feb. 15 /PRNewswire/ -- CoStar Group, Inc. (Nasdaq: CSGP)
announced last Friday that it had completed the acquisition of COMPS.COM
under a merger agreement entered into on November 3, 1999, among CoStar,
COMPS and a wholly-owned subsidiary of CoStar.
Under the terms of the merger agreement, each share of COMPS common stock
will be exchanged for either $7.50 in cash or 0.31496 shares of CoStar
common stock, at the election of the holder and subject to adjustment to
ensure that 49.9% of the COMPS shares will be exchanged for cash and 50.1%
of the COMPS shares will be exchanged for CoStar common stock.
Based on available information, CoStar estimates that COMPS stockholders
that have elected 100% stock in the merger will receive approximately 54.5%
CoStar common stock and approximately 45.5% cash for each share of COMPS
stock. These percentages are subject to finalization by the exchange agent.
COMPS stockholders that have elected 100% cash will receive all cash, and
COMPS stockholders that did not make any election will receive all cash.
CoStar estimates that the exchange agent will issue CoStar common stock and
cash payments within approximately one week to COMPS stockholders who have
properly tendered their COMPS common stock, subject to finalization of the
percentages.
For more information, please contact Meredith Leyva at (202) 421-6214. This
news release includes "forward-looking statements," which involve many
risks and uncertainties that could cause actual results to differ
materially from these statements. If CoStar is not able to integrate the
operations of COMPS on a timely and cost effective basis, then the merger
may be not be successful. This could occur for a number of reasons,
including errors in planning, delays in implementing the integration and
unexpected events in the markets in which CoStar operates. Important
factors that could cause actual results to differ materially include, but
are not limited to, those listed in CoStar's Registration Statement on form
S-1, filed March 24, 1999, and CoStar's Registration Statement on Form S-4,
filed on December 10, 1999.
SOURCE CoStar Group, Inc.
CONTACT: Meredith Leyva, 202-421-6214, for CoStar Group, Inc./
