Sunnyvale, CA-based Matterport, Inc. (NASDAQ:MTTR) announced today that it has received a request for additional information and documentary materials from the Federal Trade Commission (FTC) in relation to its pending merger with CoStar Group (NASDAQ:CSGP), Inc. The request, known as the "Second Request," is part of the antitrust review process under the Hart-Scott-Rodino Act and extends the waiting period for the merger.
The Second Request could delay the merger as both companies work to comply with the FTC's inquiries. However, Matterport and CoStar Group aim to respond promptly and continue to cooperate with the FTC. Despite this development, the companies anticipate the transaction to complete in the fourth quarter of 2024, subject to Matterport stockholder approval and other customary closing conditions.
This news comes after Matterport entered into a Merger Agreement with CoStar Group on April 21, 2024. The agreement outlines a two-step merger process, which would result in Matterport becoming a wholly-owned subsidiary of CoStar Group if a minimum threshold of Matterport's stock is tendered.
Additionally, Matterport disclosed positive responses from other regulatory bodies. The UK's Competition and Markets Authority has no further questions regarding the transaction, and the UK Government has indicated it will not take any action under the National Security and Investment Act 2021.
Matterport has scheduled a special meeting of its stockholders for July 26, 2024, to vote on the proposed mergers. The SEC has already declared effective a Registration Statement filed by CoStar, which includes a proxy statement/prospectus sent to Matterport's stockholders.
In other recent news, Matterport, Inc. saw significant developments in its corporate structure and financial outlook. At the company's Annual Meeting, shareholders elected Michael Gustafson as a Class III director and ratified the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024. However, an amendment regarding the waiver of corporate opportunities did not pass.
In financial news, Deutsche Bank (ETR:DBKGn) raised its price target for Matterport's shares from $3.00 to $5.50, following the announcement of an acquisition agreement with CoStar Group. The agreement, which values Matterport at approximately $1.6 billion, received unanimous support from the company's board of directors. Meanwhile, Northland initiated coverage of Matterport with an Outperform rating and a price target of $3.50, indicating confidence in the company's growth potential.
Furthermore, Matterport's technology was adopted by UK-based home extension company Resi, leading to a reduction in average survey times and a cut in capture hardware costs. These recent developments reflect the ongoing growth of Matterport and the increasing recognition of its innovative technology in the market.
InvestingPro Insights
As Matterport, Inc. navigates through the regulatory process of its pending merger with CoStar Group, Inc., it's crucial for investors to consider the company's financial health and market performance. According to InvestingPro data, Matterport currently holds a market capitalization of $1.37 billion, with a notable revenue growth of 9.63% over the last twelve months as of Q1 2024. Despite operating at a loss, with an operating income margin of -121.49%, the company's stock has experienced a significant rally, with a strong return over the last three months totaling 112.75%. This is complemented by an impressive 8.5% return over the last week alone.
Two InvestingPro Tips highlight that Matterport holds more cash than debt on its balance sheet and that its liquid assets exceed short-term obligations, suggesting a solid liquidity position. However, analysts do not anticipate the company will be profitable this year, and it has not been profitable over the last twelve months. These insights could be crucial for investors considering the long-term potential of Matterport, especially in the context of the merger.
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