Domain buys Insight Data Solutions in $159m deal

Domain buys Insight Data Solutions in $159m deal

Major property portal Domain has entered into a binding agreement to acquire property valuation proptech Insight Data Solutions (IDS).

The deal delivers IDS, founded by Louie Psaroulis, Mike Thanos and Chris Spanos, with $60 million cash upfront with the potential for that amount to rise up to a maximum of $159 million.

Commenting on the acquisition, IDS’ founders were excited to be joining Domain. 

“Domain’s unique data assets and extensive industry reach will enable us to accelerate the evolution of our product offerings to government and corporate customers,” they said. “IDS and Domain are a natural fit with a shared vision to deliver leading property data and analytics to the Australian market and we look forward to working closely with their leadership team”. 

The acquisition of IDS establishes Domain as a market-leading provider of land and property valuation, insights and analytics services into the Government sector, and significantly expands the size of the Property Data Solutions pillar of Domain’s marketplace strategy.

Domain CEO Jason Pellegrino said IDS brought rich experience in building property data platforms and delivery services to support the workflow requirements of Governments, particularly in regards to land valuations to Domain. 

“Federal, State and Local Governments will always play a central role in Australia’s property ecosystem,” Mr Pellegrino said. “IDS’ platforms, workflow tools and property analytics allow Governments to make more timely, accurate and nuanced decisions regarding land valuations, land use, tax policy and revenues. 

“The importance of these services is likely to amplify as governments deal with increasing land scarcity, the challenges of housing affordability and planning policy, increased infrastructure investment and the transition of revenue from transfer duties to annual levies based on land valuation”. 

Established in 2013, IDS is a market-leading property data business focused on two key customer segments: Government and Corporate. IDS’ platform and workflow tools connect many of the key stakeholders in the property ecosystem: the Office of the Valuer General (VG) who is responsible for statutory valuation processes; the Local Government Authorities (LGAs) which levy rates based on these valuations; the valuers who perform the statutory valuations; and the public whose rates are based on the statutory valuations. 

In the Government segment, the IDS platform VM Online is the leading private statutory valuation workflow platform of scale in Australia. It manages 28% of national statutory valuation volumes, with leading positions in Victoria and the City of Adelaide. The vast majority of remaining valuation volumes are managed in-house by State VGs and LGAs. 

In the Corporate sector, IDS has a bank-grade Automated Valuation Model product suite and its valuation models are in use by smaller lenders, fintechs and mortgage brokers. 

As part of the transaction the IDS founders, Louie Psaroulis, Mike Thanos and Chris Spanos, will remain with the business to continue to drive the IDS strategy and enhance Domain’s marketplace strategy. 

Mr Pellegrino said “IDS is a strong standalone business and a great addition to our Property Data Solutions pillar. Through the acquisition, we can support IDS to keep innovating and expanding into new markets and geographies”. 

Under the terms of the signed agreement, Domain Group will acquire 100% of the securities in Insight Data Solutions Holdings Pty Limited for a cash price of $60 million in October this year. Additional payments dependent on performance will be payable in tranches between completion and June 2027, which could total up to a maximum of $159 million. 

IDS is anticipated to deliver on-target FY22 revenue of $7 million before the impact of any operating synergies. Over the next five years, on-target performance would see IDS executing on identified growth opportunities to deliver a greater than four-fold increase in total revenue in FY26.