Fast-growing Seattle-based Porch Group Inc., which offers software for the home services and insurance industries, plans to acquire the home-warranty and home-inspector software and services business of Carmel-based Residential Warranty Services for $33 million.
Porch made the announcement as part of its year-end financial report, issued earlier this month. The $33 million deal includes $29 million in cash, $4 million in Porch stock and additional contingent consideration that’s tied to the performance of a recently launched business line.
The purchase price represents just more than three times RWS’s annualized revenues of $10 million, Porch said.
The deal does not include the mold-testing and radon-monitoring parts of RWS’s business, Porch said.
“For Porch, it’s just clearly a great fit after working as partners together for many years and strengthens our market-leading position in the strategic home inspection industry,” Porch founder and CEO Matt Ehrlichman told investors during a March 1 conference call.
In written remarks provided to IBJ, Porch said “the majority of [RWS] employees” will join Porch, “and we look forward to learning from them and growing together.” Porch declined to disclose how many employees RWS has in Carmel.
The Carmel company will continue to do business under the RWS brand post-acquisition, Porch said.
According to LinkedIn, RWS was founded in 1988 and has between 51 and 200 employees. Nathan Thornberry is the company’s president.
Porch launched in September 2013 under the name Porch.com Inc. It currently has more than 24,000 business customers—home inspectors, mortgage companies, moving companies, utility providers, roofers and others—who use Porch to help improve their operations and grow their business. The company went public in December 2020 through a merger with a special purpose acquisition company called PropTech Acquisition Corp.
Porch reported $192.4 million in revenue last year, up 166% from 2020. The company has said it expects to generate $320 in revenue this year.