form_8-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): September 11,
2007
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COSTAR
GROUP, INC.
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(Exact
name of registrant as specified in its charter)
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Delaware
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0-24531
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52-2091509
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(State
or other jurisdiction of incorpoation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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2
Bethesda Metro Center, Bethesda, Maryland
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20814
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (301) 215-8300
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Not
Applicable
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(Former
name or former address, if changed since last
report.)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
8.01. Other Events
On
September 11, 2007, CoStar Group, Inc. (“CoStar”) entered into an
enterprise-wide agreement (the “Agreement”) with CB Richard Ellis, Inc.
(“CBRE”), the world’s largest commercial real estate services
firm. The Agreement has a potential term of 11 years, pursuant to
which CoStar has agreed to license its full suite of commercial real estate
information services for all of its U.S. markets to all CBRE U.S.
personnel. The Agreement is a significant expansion of CoStar’s
current agreement with CBRE, as all CBRE personnel, including approximately
800
additional commercial real estate professionals located in CBRE offices and
CBRE
partner offices throughout the U.S., will now have access to all of CoStar’s
U.S. information services, including services and markets for which CBRE
personnel previously did not have such access.
The
Agreement has a potential value in excess of $100 million in revenue and
is the
largest financial commitment CoStar has ever received from a single
client. The fees payable by CBRE during the term of the Agreement are
subject to a limited number of upward or downward adjustments if there are
increases or decreases in the number of CBRE professionals that will have
access
to CoStar’s services. Fees may also change in the 6th and 9th years
based on the Consumer Price Index. The $100 million potential value
amount assumes a relatively constant number of CBRE professionals will have
access to CoStar’s services during an 11-year term and that there will be
relatively consistent annual Consumer Price Index increases throughout the
term. The agreement potentially covers 11 years; CBRE has one
cancellation option after the fifth year and one cancellation option after
the
eighth year, each upon written notice.
CoStar
and CBRE have agreed to mutual non-competition covenants that run through
the
term of the Agreement and continue for two years beyond the date of termination
or nonrenewal of the Agreement.
In
the
U.K., CBRE will continue to access all of CoStar's information services
available in the U.K. under separate license agreements.
The
Agreement replaces separate agreements between CoStar and each of CBRE and
Trammell Crow Co., which CBRE acquired in December 2006. The
transaction is not expected to significantly affect CoStar’s 2007 revenue or
earnings. Financial terms include fee step-ups beginning in January
2008. Revenue received from CBRE does not currently account for more
than 5% of CoStar's revenue, and CoStar does not anticipate that the revenue
under the Agreement will account for more than 5% of its
revenue.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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COSTAR
GROUP, INC.
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By:
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Date: September
12, 2007
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/s/
Brian J.
Radecki
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Name:
Brian J. Radecki
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Title: Chief
Financial Officer
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