Vector Group (NYSE:VGR) stock jumps 9.1% after the company announced after Monday's market close that it will spin off its Douglas Elliman (NYSE:DOUG) real estate brokerage group focused on premium price points.
Douglas Elliman, one of the largest residential brokerage companies in the New York metropolitan area, operates in New York City, Long Island, Westchester, and the Hamptons. It has also expanded into Florida, California; Aspen and Snowmass, Colorado; Houston, Dallas, and Austin; and Massachusetts.
The company intends to expand its footprint more, add cutting-edge property technology, and invest in property tech companies through New Valley Ventures.
"We are doing this now, especially given current trends in the large and growing U.S. residential real estate industry at a time when the size of our business has reached a critical mass, positioning us well to succeed in the market as a standalone company," said Vector President and CEO Howard Lorber during Vector's earnings call.
Vector Group (VGR) holders will get one share of the spinoff for every two VGR shares held. The company also expects that the new company will pay $0.05 per share quarterly dividend to Douglas Elliman common stock holders. Vector (VGR) will continue to pay $0.20 per share quarterly dividend.
Currently, Douglas Elliman has ~6,600 agents. And for the 12 months ended Sept. 30, 2021 had gross transaction volume of $47.7B, revenue of $1.29B and adjusted EBITDA of $106.2M.
Previously (Nov. 8), Vector EPS misses by $0.06, beats on revenue