RP Data Limited - proposed acquisitions of ValEx Group Pty Ltd and the Valuation Management Software division of Sandstone Technology Pty Ltd

Summary

RP Data proposes to acquire ValEx Group and the Valuation Management Software division of Sandstone Technology.

Market definition

The ACCC considered the competitive effects of the proposed acquisitions in the context of the following markets:

- the national market for the supply of valuation management software (VMS) platforms;

- regional markets for the supply of physical property valuations (including both kerbside and full valuations); and

- the national market for the supply of electronic property valuations (including automated valuation models (AVMs) and electronic valuation reports (EVRs) or 'desktops').

Competition analysis

The proposed acquisitions would result in the horizontal aggregation of three suppliers of VMS platforms. It also results in the vertical integration of the merged firm into physical and electronic property valuations.

The ACCC concluded that the proposed acquisitions were unlikely to result in a substantial lessening of competition in the relevant markets. In forming this view, the ACCC had regard to:

- the relatively low barriers to entry in the market for the supply of VMS platforms and the potential for software developers or valuation firms to enter this market; and

- the ability for lending institutions to bypass the merged firm by sponsoring new entry or shifting the VMS function in-house.

The ACCC also considered that the merged firm would not have the ability to foreclose any competitors in downstream valuation markets due to lending institutions' requirements to source valuations from a mix of valuation firms in each local area as well as the two factors highlighted above.