DEFA14A 1 0001.txt SOLICITING MATERIAL PURSUANT TO SECTION 240,14A-11 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [_] Definitive Proxy Statement [_] Definitive Additional Materials [X] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12 Homestore.com -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------------- Notes: homestore.com(TM) There's no place like home. (TM) Transaction Summary . Transaction: Homestore.com acquires Move.com . Structure: Tax free, stock-for-stock acquisition . Shares Issued: 26.3 HOMS shares . Ownership: Pro forma 80% HOMS shareholders / 20% Cendant (15% to be held by Cendant Corp) . Board: 6 HOMS / 1 Cendant . Governance: 10 year standstill; 15 years proportionate voting . Conditions: HSR clearance; Homs shareholder approval . Accounting: Purchase accounting . Closing: Anticipated Q1 2001 _____________________________________________________________homestore.com(TM)__ Transaction Highlights . Highly complementary fit = a powerful combination . Leading online real estate networks . Leverages top offline real estate network - Coldwell Banker, Century21, ERA, NRT franchises . Leaders in online rentals . Broad suite of relocation tools + top relocation company . Critical mass for online real estate transactions . 40 year online franchise and listing agreement . Numerous top and bottom line synergies . Accretive transaction _____________________________________________________________homestore.com(TM)__ move.com It's a better move . Cendant's online real estate and relocation destination . Headquartered in San Francisco
Rent.net 40 Year ONLINE Product Agreements move.com RENTAL GUIDE Commitments Other It's a better move . Exclusive access . Online home . A leading online . Cendant to purchase . Welcome Wagon to aggregated listings, rental site professional products online and print listings from mortgages and for franchises and advertising leading offline moving related . 13,000+ agents company with franchises - services apartment 35,000+ Coldwell Banker, communities . Cendant investment merchants Century21 and . Distribution in HomeStore relationships ERA relationships with . Senior housing, transaction platform AOL, Altavista, corporate . Exclusive NRT . Replaces and Yahoo!, housing and . 3-year exclusive listings extends existing Excite@Home, self-storage transaction platform agreements Lycos, Go services commitment from . Marketing terminating in Network, Ask NRT and Cendant agreement June, 2002 Jeeves Mobility through 2040
_____________________________________________________________homestore.com(TM)__ A Complementary Fit = A Powerful Combination
homestore.com move.com It's a better move . Leading real estate network . Leading real estate network . Listings: 1,400,000 . Listings: 450,000 . Traffic: 4.5MM UU . Traffic: 1.9MM UU . Web presence for 4 of top 7 national . Web presence for other 3 of top 7 national franchises franchises . Established professional products and . Largest network of real estate services provider professionals . Industry leading partnerships . Leverages Cendant's offline assets . NAR, NAHB, MHI, AIA, NCOSH . Coldwell Banker, Centruy21, ERA, NRT . FNMA . PHH, Cendant Mobility . Leader in rentals . Leader in rentals
_____________________________________________________________homestore.com(TM)__ the vision a wired marketplace ------------------- Homestore.com(TM) has created an online marketplace for the home and is enabling its consumer and professional participants to communicate and transact business together CONSUMER [GRAPHIC] Shelter and Self Expression Ideas - Decisions - Transactions V-Portal BUY/ SELL/ FIND TRANSACT MOVE WIRE PERSONALIZE MAINTAIN TRANSACT V-ASP Marketing - Leads - Transactions Sell Services and Sell Products [GRAPHIC] PROFESSIONAL A visual of the wired marketplace: Globe showing consumers on top and professionals on bottom encircling a bar across the middle with all the tasks involved in the home life cycle. The top half of the Globe is title: V-PORTAL referring to our vertical portal for consumers. The bottom half of the Globe is title: V-ASP referring to our vertical application solutions provider strategy for home service professionals. Market Size [CHART] Two pie charts showing Size of Market: Pie chart on the left shows $5.4 Trillion globally made up of $3.5 trillion international and $1.9 trillion for U.S. Pie chart on the right shows the breakout of the US market of $1.9 Trillion dollars into: $360 billion Rentals with footnote 6 $940 billion Existing Homes with footnote 1 $175 billion New Homes with footnote 5 $140 billion Remodeling with footnote 4 $225 billion Products with footnote 3 $95 billion Real estate transaction fees with footnote 2 Sources: /1/ /2/ Real Estate Outlook, NAR April 2000; /2/ Mortgage Bankers Assoc., Freddie Mac, Fannie Mae, Fidelity National Financial, Insure.com, National Notary Association and Mortgage Insurance Companies of America; /3/ Demographics USA, 1999, Radio Advertising Bureau's Instant Background Report, 1999, Retail Survey US Census 1999; /3/ /4/ Harvard Joint Center for Housing Studies, April 2000; /4/ US Census c-50 report, July 2000; /5/ US Census Manufacturing and Construction Division 1999; /6/ MP/F Research March 2000, National Multi Housing Council January 2000; /7/ Self Storage Almanac 1999, Household Goods Carriers Bureau 1998 ________________________________________________________homestore.com(TM)_______ Source: EuroMonitor: European Marketing Data and Statistics, International Marketing Data and Statistics, 2000 Addressable Market [CHART] Pie chart showing Size of Addressable Market of over $300 billion: Pie chart shows the breakout into: $5 billion Advertising with footnote 1 $200 billion International with footnote 5 $12 billion Relocation with footnote 6 $23 billion eCommerce with footnote 4 $10 billion Subscription made up of Yellow Pages, Classifieds, Other B2B with footnote 2 $95 billion Real estate transaction fees with footnote 3 Footnotes are: /1/ Advertising Age, Sept. 1999; /2/ Newspaper Assoc. of America 1999, Yellow Pages Publishers Association 1998,1999, Warburg Dillon Reed B2B eCommerce January 2000; /3/ Real Estate Outlook, NAR April 2000; Mortgage Bankers Assoc. mbaa.org/marketdata/2000, Inside Mortgage Finance; /4/ Demographics USA, 1999, Radio Advertising Bureau's Instant Background Report, 1999, Retail Survey US Census 1999, Harvard Joint Center for Housing Studies, April 2000. All at a 10% margin; /5/ Estimate at 6% of total (less than US) /6/ Household Goods Carriers Bureau 1998 ______________________________________________________homestore.com(TM)_________ [HOMESTORE.COM WEB PAGE] Expanding the addressable market [CHART] Bar chart showing a timeline of Homestore's expansion into different categories with visual of Homestore.com home page in background: 1997 Existing Homes 1998 Existing Homes, New Homes Q1 1999 Existing Homes, New Homes Q2 1999 Existing Homes, New Homes, Rentals Q3 1999 Existing Homes, New Homes, Rentals, Remodel Q4 1999 Existing Homes, New Homes, Rentals, Remodel, Move, Finance Decorate, Home Tech, Shop Q1 2000 Existing Homes, New Homes, Rentals, Remodel, Move, Finance Decorate, Home Tech, Shop, Manufactured Housing, Architecture, Vacation Homes, RE Transaction, Content Management Q2 2000 Existing Homes, New Homes, Rentals, Remodel, Move, Finance Decorate, Home Tech, Shop, Manufactured Housing, Architecture, Vacation Homes, RE Transaction, Content Management, Lawn and Garden, Senior Housing, Health and Safety, Contact Management, Telecommunications Q3 2000 Existing Homes, New Homes, Rentals, Remodel, Move, Finance Decorate, Home Tech, Shop, Manufactured Housing, Architecture, Vacation Homes, RE Transaction, Content Management, Lawn and Garden, Senior Housing, Health and Safety, Contact Management, Telecommunications, Relocation, Van lines, AOL House and Home Channel, Utilities, Comparable Sales CONSUMER [GRAPHIC] ADVERTISING V-Portal BUY/ SELL/ FIND TRANSACT MOVE WIRE PERSONALIZE MAINTAIN TRANSACT V-ASP TRANSACTIONS MARKETING - SUBSCRIPTIONS - ASP PRODUCTS [GRAPHIC] PROFESSIONAL How we monetise the wired marketplace: Globe showing consumers on top and professionals on bottom encircling a bar across the middle with all the tasks involved in the home life cycle: Below consumers is a descriptive word in a semi-circle expressing Homestore's revenue stream on the consumer side: Advertising. The top half of the Globe is titled: V-portal referring to our verticle portal Below professionals are descriptive words in a semi-circle expressing Homestore's revenue stream on the professional side. Subscriptions (both marketing and ASP products). Then a second semi-circle with the second revenue stream from professionals: Transactions. The bottom half of the Globe is titled: V-ASP referring to our vertical ASP products for home service professionals ______________________________________________________homestore.com(TM)_________ Marketing Subscription Revenue Homestore's . Subscription-based marketing services for professionals Business: . On line classifieds and "yellow pages" . 131,000 professional subscribers Q3 2000 ________________________________________________________________________________ Acquisition . Substantially increases professional subscriber base Benefits: . Creates more attractive audience . Larger consumer audience . Clear leader in rentals . 35,000 merchants (Welcome Wagon) . Reduces customer acquisition costs . Accelerates product development ______________________________________________________homestore.com(TM)_________ ASP Subscription Revenue Homestore's . Mission critical applications for the professional Business: . Hosting services . Listings management . Contact management . Back office technology ________________________________________________________________________________ Acquisition . ASP products become preferred solution for Cendant network Benefits: . Usage commitment . Hosting commitment for 3 Cendant brand sites . Expands ASP footprint and increases stickiness . Reduces customer acquisition costs . Accelerates product development ______________________________________________________homestore.com(TM)_________ Transaction Revenue Homestore's . Enabling technology for real estate transactions Business: . Buying/selling a home (eRealtor.com) . Moving (iMove) . More to come... ________________________________________________________________________________ Acquisition . Builds critical mass for transaction solutions Benefits: . 3 year transaction platform usage commitment . Cendant Mobility - Leader in relocation - 50,000 transactions per year . NRT - Top broker network - 350,000 transactions per year . Endorsement of platform by Coldwell Banker, Century 21, ERA, NRT . Cendant investment in eRealtor.com ______________________________________________________homestore.com(TM)_________ Advertising Revenue Homestore's . Building the most attractive audience for advertisers Business: ________________________________________________________________________________ Acquisition . Extends consumer reach Benefits: . 1.5MM UU (6MM total) . Additional eyeball minutes . Enhances new categories . Senior housing . Corporate services . Self-storage . One-stop shopping for advertisers . Adds Cendant brands as a new promotion channel ______________________________________________________homestore.com(TM)_________ Integration Priorities . John Giesecke to manage the integration process . Task force headed by the heads of technology, HR, sales and ecommerce . Focused on: . Maximizing top-line synergies . Retaining key talent . Site and facility integration . Sales force integration . Integrated local merchant strategy . Cutting costs and reducing redundancy ______________________________________________________homestore.com(TM)_________ Substantial Cost Savings . Reduce customer acquisition costs . Leverage and consolidate distribution - AOL, Yahoo!, Microsoft . Reduce marketing expenses - image, branding . Consolidate back office and other G&A functions . Achieve efficiencies in consolidation of sites . Consolidate facilities ______________________________________________________homestore.com(TM)_________ Appropriate Governance . Control: 6 HOMS/1 Cendant board seat . Standstill agreement: 10 years . Voting agreement: Cendant shares vote in proportion with majority for 15 years . Sale restrictions: No sales in year 1 Years 2 and 3 limited to 3.2MM shares in total Sales limited to 800,000 shares per authorized quarter in no more than 4 out of 8 quarters ______________________________________________________homestore.com(TM)_________ Long-Term Pro Forma Business Model Target ------ Gross Margin 75 - 80% Sales & Marketing 36 - 40% Research & Development 5 - 6% General & Administrative 9 - 10% Operating Margin 20 - 25% ______________________________________________________homestore.com(TM)_________ Transaction Highlights . Highly complementary fit = a powerful combination . Leading online real estate networks . Leverages top offline real estate network - Coldwell Banker, Century21, ERA, NRT franchises . Leaders in online rentals . Broad suite of relocation tools + top relocation company . Critical mass for online real estate transactions . 40 year online franchise and listing agreement . Numerous top and bottom line synergies . Accretive transaction ______________________________________________________homestore.com(TM)_________ homestore.com (TM) There's no place like home. (TM)