Lessen, the premier tech-enabled, end-to-end solution for outsourced real estate property services, announced today a strategic acquisition of SMS Assist, an industry-leading facilities maintenance technology company. By merging the complementary strengths of both companies, Lessen will continue to tackle real estate’s pain points, providing its customers with a scalable, tech-enabled, enterprise solution for commercial and residential services. The two companies will serve a national footprint of approximately 250,000 residential and commercial properties and facilitate approximately 2.5 million repair and maintenance orders per year – in tandem with bolstering a broader range of property services.
“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 transaction consists of both cash and stock, with Lessen raising approximately $500 million in combined new debt and equity, in addition to SMS Assist stockholders exchanging a portion of SMS stock for Lessen stock, resulting in an increased combined company valuation of over $2 billion in enterprise value. Debt and equity investors who backed this transaction include Monroe Capital, Värde Partners and Koch Real Estate Investments. Additionally, clients who invested in the deal with Lessen include Invitation Homes and American Homes 4 Rent, among others.
Following the close of the transaction, Lessen’s McKee will continue to lead the newly combined company as CEO and serve as Chairman of the Board of Directors. Michael Rothman, founder and chairman of SMS Assist 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.”
Kyle Asher-head of opportunistic investing at Monroe Capital said, “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.
Brad Greiwe, co-founder and managing partner at Fifth Wall, a current Lessen investor, shared, “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.”
How It Works
The new, combined technology platform will allow the many service providers—from contractors, painters, plumbers to electricians and more—to act as one, performing work at a national level not previously possible. This work will be overseen and inspected for quality by Lessen’s in-house project managers. The combined solution will help owners overcome skilled labor shortages, while simultaneously reducing administrative burden, providing efficiency and real-time project updates.
Contractors and providers of all sizes are already joining Lessen and SMS Assist’s existing network of more than 25,000 professionals, allowing them to gain access to work and get paid rapidly with less expense to their business. This acquisition also provides Lessen with additional scale to enhance its materials sourcing and last-mile logistics capabilities to unlock key growth opportunities for clients and contractors.
Evercore acted as the exclusive financial advisor, and Fenwick & West LLP acted as legal counsel to Lessen. J.P. Morgan Securities, LLC acted as financial advisor and Katten Muchin Rosenman, LLP as well as Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to SMS Assist.
Lessen is the premier provider of tech-enabled, end-to-end renovation, turn, and maintenance services for the residential real estate rental industry. Powered by our proprietary technology suite, our local field project managers deploy and oversee a network of vetted service professionals in 40+ markets delivering consistency, quality and speed, at scale. Lessen enables our clients to overcome labor shortages, reduce headcount and overhead, grow and scale their business and benefit from our supply chain and buying power to secure project materials – Lessening burden, saving our clients time and money.
Lessen Inc. is a venture-backed, privately held company headquartered in Scottsdale, Arizona. To learn more, please visit Lessen.com.
About SMS Assist
SMS Assist is redefining the way service providers and property owners work together by delivering unprecedented transparency and control within the facilities maintenance industry. Retail stores, banks, restaurants, rental homes, and more make up the over 200,000 properties that rely every day on our technology platform, in-house subject matter experts and 24/7 support. We leverage our network of 20,000 skilled providers across more than 55 trades to deliver an exceptional maintenance experience to the communities where we live and work.
SMS Assist has offices in Chicago, IL and Phoenix, AZ. To learn more, visit SMSAssist.com.