Ten-X, LLC, the nation's leading online real estate marketplace, and Thomas H. Lee Partners, L.P. (THL), a premier private equity firm investing in middle market growth companies, announced that they have signed a definitive agreement under which affiliates of THL will lead a majority recapitalization of Ten-X. Members of Ten-X's senior management team, Stone Point Capital, and CapitalG (formerly Google Capital), among others, which currently are investors in Ten-X, will continue to hold minority stakes in the company, according to a press release.
The transaction is designed to support the next phase of growth for Ten-X. Terms of the transaction were not disclosed. The transaction is expected to close in the third quarter of 2017, subject to customary closing conditions.
"After thoughtful consideration, we determined that THL is the right equity partner for Ten-X," Ten-X CEO Tim Morse said in the release. "They have an exceptional history of investing in growth-oriented businesses, such as Ten-X, and we firmly believe that they will allow us to reach our full potential and help us build on our leading position in the online real estate market. I am also pleased that our management team and existing investors will retain an ownership position in the business as we continue to provide our customers with best-in-class solutions."
Founded in 2007 and headquartered in Irvine and Silicon Valley, Calif., Ten-X provides an online real-estate marketplace that allows individuals and investors to buy and sell residential and commercial real-estate properties using both desktop and mobile channels.
"We are thrilled to partner with THL as we enter an exciting, new chapter in Ten-X's history that is focused on expanding our reach and broadening our product and marketplace offerings," Ten-X Executive Chairman Jeff Frieden said. "We also believe that the THL team shares the same core values and commitment to excellence that have made Ten-X the established leader in the online marketplace segment, making them the ideal cultural fit."
THL will support Ten-X's continued growth by contributing operational and financial resources and strategic expertise as the company builds on its proven platform, pursues additional monetization opportunities, and executes on its growth objectives. The company will retain its corporate headquarters in Irvine and Silicon Valley and will continue to be led by Chief Executive Officer Tim Morse and the other members of its senior management team.
"Tim Morse and Ten-X's experienced management team have created a transformational market leader in the real estate industry. The company's best-in-class online platform creates better outcomes for both buyers and sellers and we believe there are multiple levers for substantial growth as online penetration continues in the real estate market," THL Managing Director Jim Carlisle said. “THL's effort included leadership from across the Firm, including our Media, Information Services and Technology Group, our Business and Financial Services Group and our Strategic Resource Group. We all look forward to partnering with Jeff and Tim to further strengthen Ten-X's unique online platform."
J.P. Morgan Securities LLC and Wells Fargo Securities acted as financial advisors and Kramer Levin Naftalis & Frankel LLP acted as legal advisor to Ten-X. Antares Capital and Guggenheim Securities will lead the debt financing. Guggenheim Securities also acted as a financial advisor and Kirkland & Ellis LLP acted as legal advisor to THL.