Is PropertyGuru’s delisting good for SEA’s tech scene?

PropertyGuru’s stint as a listed company might soon be coming to an end.

Last week, Swedish private equity (PE) firm EQT offered to acquire the Southeast Asian property listings portal for US$1.1 billion.

Upon completion of the deal, which is expected to close in Q4 2024 or Q1 2025 and is subject to approval by regulators and PropertyGuru shareholders, the firm will be delisted from the New York Stock Exchange (NYSE). It will return to being a private company, having spent around three years on the public markets.

PropertyGuru’s listing in NYSE in March 2022 / Photo credit: NYSE

The delisting follows layoffs at the proptech firm earlier this year and comes amid a slowdown it’s facing in Vietnam. PropertyGuru is also making a big bet on a fintech and data analytics offering it’s scaling up across its four markets – Singapore, Malaysia, Vietnam, and Thailand.

This is the second deal this year involving the take-private of a US-listed, Singapore-founded tech company. In June, business process outsourcing firm TDCX delisted from the NYSE at an offer price of US$7.20 per share.

Such deals raise questions about what effect they will have on investor sentiment toward US-listed Southeast Asian companies in the future, along with the implications for the region’s startup ecosystem as a whole.

Not lowball

The offer from EQT seems to be a reasonable one, with the implied price-to-sales multiple being in the middle of other publicly listed property portals.

Two PE firms – TPG and KKR – hold a combined 56% stake in PropertyGuru, and they are unlikely to have accepted a lowball offer.

Indeed, as the announcement pointed out, the all-cash offer of US$6.7o per share was at a 52% premium to PropertyGuru’s closing price on May 21, which was the last trading day before media reports on the potential buyout sent the company’s shares up.

However, investors who bought into PropertyGuru when it went public in March 2022 via a special purpose acquisition company merger would have lost money. At the time, the firm was valued at US$1.6 billion – around 45% higher than the current deal value.

In TDCX’s case, the acquisition price of US$7.20 – already raised from the initial US$6.60 – was lower than how its shares had traded for a long period of time.

See also: TDCX’s CEO aims to delist the BPO firm amidst struggling valuation

That said, it should be noted that unlike TDCX, PropertyGuru’s stock traded above the US$6.70 offer price on only a handful of days after it went public.

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