CoStar Pushes Into Aerial Imaging With $730M Vexcel Buy
CoStar Group agreed to acquire Vexcel, an aerial imaging company, for $730 million in cash. Vexcel uses manned aircraft and proprietary technology to capture high-resolution aerial photographs across 45 countries, generating $140 million in revenue over the last 12 months, up 30% year-over-year. CoStar plans to integrate Vexcel’s aerial photography with its ground-level property database and apply artificial intelligence to extract data from the images. Erik Jorgensen will remain CEO of Vexcel, which will continue operating under its own brand.
CoStar has relied on vehicle-mounted cameras to photograph buildings for its property database. The company sees Vexcel’s aerial platform as a complement to that ground-based approach, enabling broader property coverage and new data extraction capabilities through AI. CoStar CEO Andy Florance said the company’s 2,000-person sales team can accelerate Vexcel’s growth beyond its current six-person sales force. The deal follows CoStar’s $1.6 billion acquisition of 3D imaging firm Matterport, which closed in February, and its $815 million purchase of housing data provider Zonda in August.
CoStar reported third-quarter revenue of $952 million, up 14% year-over-year, and raised its full-year guidance. But shares fell more than 13% after the earnings release, extending a 65% decline over the past year. Investors focused on annualized net new bookings, which dropped to $37 million from $84 million a year earlier. Florance attributed the decline to economic headwinds and slower sales force growth, prompting analysts at BTIG and Jefferies to lower their price targets for the stock.
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