Tech firm Lessen acquires SMS Assist signaling A New Era for property technology and services

CIOTechOutlook Team | Friday, 13 January 2023, 04:09 IST

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SMS Assist, a prominent provider of facilities maintenance technology, was strategically acquired by Lessen, the leading tech-enabled end-to-end solution for outsourced real estate property services. Lessen will continue to address real estate's problems by combining the complementary strengths of the two businesses and offering its clients a scalable, tech-enabled enterprise solution for commercial and residential services. Along with enhancing a wider range of property services, the two businesses will support a national footprint of over 250,000 residential and commercial properties and facilitate 2.5 million repair and maintenance requests annually.
 
“Lessen recognized early on the opportunity to provide an enterprise-level solution that solved the real estate industry’s long-tenured property services pain points,” said Jay McKee, founder and CEO, Lessen. “This deal demonstrates the increasing demand within the underpenetrated, $330 billion addressable North American property services market for a unified, extensible delivery platform that provides transparency, efficiency and data-driven insights for the entire real estate ecosystem including investors, owners, managers and service providers.”
 
The deal involves both cash and stock, with SMS Assist investors swapping a portion of their SMS stock for Lessen stock and Lessen acquiring over $500 million in new debt and equity in total. As a result, the combined enterprise value of the two companies has climbed to over $2 billion. This purchase was supported by debt and equity investors such Koch Real Estate Investments, Värde Partners, and Monroe Capital. Invitation Homes and American Homes 4 Rent are two other clients who invested in the arrangement with Lessen.
 
Lessen's McKee will continue to serve as the merged company's CEO and chairman of the board of directors after the deal is completed. SMS Assist's creator and chairman, Michael Rothman, said: “The acquisition unlocks significant value through synergies building on a long operating history and will show we are well positioned together with Jay at the helm, leading from a consistent track record of growth.”
 
According to Monroe Capital's Kyle Asher, co-head of opportunistic investing, “As of one of the largest investors in the transaction and an active direct investor in the real estate space, Monroe is impressed by the independent growth of both Lessen and SMS with their combination creating a platform offering residential and commercial technology-enabled property management services.”
 
Managing partner at Fifth Wall and current Lessen investor Brad Greiwe said, “This transaction is an ideal representation of Fifth Wall’s flywheel with our limited partners, portfolio companies, commercial partnerships and fresh capital coming together to create an end-to-end industry-leading company. While proptech consolidation is far from an anomaly, a venture-backed technology company purchasing an incumbent player is not something you see every day. It is a true validator of Jay and his entire team at Lessen and their success; we look forward to their next chapter.”
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