Compass(US:COMP)2026-01-07 12:05Merger and Acquisition Details - Compass entered into a merger agreement with Anywhere on September 22, 2025, with the merger expected to close, making Anywhere a wholly owned subsidiary of Compass[1]. - The merger will be accounted for as a business combination under ASC 805, with the consideration allocated to Anywhere's assets and liabilities based on their estimated fair values[12]. - Each share of Anywhere common stock will be converted into 1.436 shares of Compass Class A common stock at the effective time of the merger[6]. - The merger is expected to enhance Compass' market position and operational capabilities through the integration of Anywhere's assets and resources[13]. - Compass is considering alternative financing arrangements, including a potential issuance of convertible notes, to finance the acquisition[15]. - The estimated fair value of consideration transferred to acquire Anywhere is $1,874.5 million, which includes $1,414.0 million in equity portion and $416.8 million for the repayment of certain Anywhere debt[56]. - Compass shares issued in the merger amounted to 160,866,206, based on an exchange ratio of 1.436[56]. - The company expects to incur restructuring costs of $40.0 million related to the merger[52]. - Goodwill recognized in the merger amounts to $2,463.2 million, reflecting the excess of the estimated merger consideration over the fair value of net assets acquired[60]. Financial Performance - Total revenue for the nine months ended September 30, 2025, reached $9,782 million, with Compass contributing $5,270 million and Anywhere contributing $4,512 million[20]. - Total operating expenses for the same period were $9,828.8 million, with commissions and related expenses accounting for $7,224.1 million[20]. - The net loss attributable to Compass, Inc. for the nine months ended September 30, 2025, was $191.5 million, resulting in a net loss per share of $0.27[20]. - Total revenue for the year ended December 31, 2024, was $11,835.3 million, with Compass contributing $6,143.3 million and Anywhere contributing $5,692.0 million[23]. - The net loss attributable to Compass, Inc. for the year was $428.5 million, translating to a net loss per share of $0.61[23]. - The net loss attributable to Compass, Inc. for the nine months ended September 30, 2025, was $17.9 million, with a net loss per share of $0.03[34]. - The net loss attributable to Anywhere Group for the year ended December 31, 2024, was $128.0 million, compared to a net loss of $64.0 million in the previous year[50]. Assets and Liabilities - Total current assets amounted to $1,210.1 million, with cash and cash equivalents at $324.8 million[18]. - Total liabilities were reported at $5,186.8 million, with current liabilities totaling $2,138.9 million[18]. - The company had total stockholders' equity of $2,301.8 million, with an accumulated deficit of $2,626.4 million[18]. - The total assets of the company as of September 30, 2025, were $7,488.6 million[18]. - Total liabilities were reported at $4,223.0 million, with long-term debt comprising $2,125.0 million[48]. - Stockholders' equity stood at $1,520.0 million, reflecting an accumulated deficit of $3,283.0 million[48]. Expenses and Costs - Research and development expenses for the nine months ended September 30, 2025, were $301.2 million[20]. - The company incurred restructuring costs of $50.2 million during the nine months ended September 30, 2025[20]. - Total operating expenses amounted to $12,278.3 million, with commissions and related expenses being the largest at $8,656.8 million[23]. - Research and development expenses totaled $198.4 million, indicating a focus on innovation and product development[38]. - The company reported a restructuring cost of $9.7 million as part of its operational adjustments[38]. - The total estimated one-time non-recurring transaction-related costs incurred prior to or concurrent with the merger are approximately $150.0 million[63]. Pro Forma Financial Information - The unaudited pro forma financial information assumes the bridge loan facility is outstanding for the entirety of the pro forma periods, reflecting its use to refinance existing indebtedness and cover transaction costs[15]. - Adjustments in the pro forma financial information include reclassifications to conform Anywhere's financial statements to Compass' presentation and non-recurring transaction costs related to the merger[15]. - The pro forma adjustments are preliminary and subject to change as additional information becomes available[5]. - The pro forma adjustment for incremental amortization expense related to the AWPH, LLC acquisition was $34.3 million for the year ended December 31, 2024[41]. - The pro forma interest expense assumes the bridge loan facility has an effective interest rate of 12.49% and will be outstanding for the entirety of the pro forma periods[71]. - The pro forma adjustment for post-combination incentive-based compensation expense is $(25.1) million for the nine months ended September 30, 2025, compared to historical expenses[69]. Financing and Debt - Compass has secured a debt financing commitment of up to $750 million in the form of a 364-day senior secured bridge loan facility to support the merger[9]. - The bridge loan facility proceeds amount to $750.0 million, with a pro forma adjustment of $324.8 million after accounting for debt issuance costs and repayment of Anywhere's revolving credit facility[66]. - Estimated interest expense on the $750.0 million bridge loan facility is projected to be $70.3 million for the nine months ended September 30, 2025[71]. - A $3.7 million loss on the early extinguishment of debt is reflected for the assumed repayment of Anywhere's revolving credit facility on January 1, 2024[70]. Tax and Valuation Adjustments - Compass partially decreased its valuation allowance by $224.2 million related to certain U.S. deferred tax assets due to the merger with Anywhere[30]. - The adjustment to deferred income taxes reflects a total decrease of $169.2 million, including a $59.0 million increase in deferred tax liabilities due to purchase accounting adjustments[64][65]. - A pro forma adjustment reflects a tax pro forma adjustment to reverse the Anywhere historical tax benefit, with a valuation allowance decrease of $224.2 million related to U.S. deferred tax assets for the year ended December 31, 2024[70].