Realogy Sues to Keep $400M Relo Business Sale From Derailing
April 28, 2020
Realogy Holdings has sued the investment firm that was set to purchase its relocation business, Cartus, for trying to back out of the $400 million deal. Realogy claims the COVID-19 pandemic is the reason the investment firm is backing away.
Realogy filed the lawsuit against SIRVA Worldwide, a portfolio company of investment funds managed by Madison Dearborn Partners, a private equity firm. Realogy revealed the lawsuit in a regulatory filing on Monday.
The deal was set to close on April 29. But SIRVA says not all of the closing conditions have been met. Further, they say it is unlikely that Realogy will be able to meet those conditions by April 30, the termination date for the contract.
Realogy asserts in the lawsuit that all conditions have been fulfilled under the sales agreement and that the deal should proceed. It alleges that SIRVA has made “false claims in an attempt to avoid their obligations under the purchase agreement in light of broad-based economic uncertainties due to the global COVID-19 pandemic.”
SIRVA, in a statement, denies the allegations. “Unfortunately, [Realogy’s] complaint addresses none of the issues raised by us,” the statement reads. “Instead, we believe the complaint constitutes a breach by Realogy of the purchase agreement.”
Realogy had announced plans to sell Cartus to SIRVA in November 2019.
The deal was to include all of the relocation assets of Realogy’s Cartus subsidiary. The deal was not to include the Cartus Affinity business or its Broker Network.
The lawsuit was filed in the state of Delaware. Realogy says it will “pursue all legal remedies to ensure that SIRVA and MDP honor the commitments made under the purchase agreement.”
“Realogy Sues to Enforce $400M Cactus Deal,” The Real Deal (April 27, 2020) and “Realogy Files Suit to Enforce $400M Cactus Sale to SIRVA Worldwide,” GlobeSt.com (April 28, 2020)
Updated: July 10, 2020