Formerly operating as Bed Bath & Beyond Inc., Neighborhood Intelligence is revising its planned arrangement with Fathom Holdings. Rather than proceeding with the all-stock acquisition revealed in June, Neighborhood Intelligence will now contribute nearly all of its digital assets to Fathom in an updated transaction that surpasses the previous deal in value.
Major Increase in Deal Value with New Proposal
The improved agreement, outlined in a joint announcement, sees Neighborhood Intelligence transferring “substantially all” of its digital assets to Fathom Holdings. This includes a nearly 40% equity stake in tZero Group, interests in Medici-related funds, and a direct participation with GrainChain. In exchange, Neighborhood Intelligence is to receive newly issued Fathom shares, resulting in a controlling stake, though the precise number of shares awaits final agreement.
Valuation for these assets comes in at no less than $130 million. This marks a considerable jump from the original June plan, when the parties had agreed to a $53 million acquisition, anticipating a closing in the latter half of 2023. It should be noted that the revised deal structure is independent of Fathom’s present market cap. Marcus Lemonis, Executive Chairman and CEO of Neighborhood Intelligence, observed that Fathom’s stock is trading lower now than it was three months earlier, a point that underscores why the new arrangement is more aligned with the intrinsic value of the merged assets.
Advancing a Digital-First Approach in Real Estate
Lemonis highlighted recent “meaningful progress” in Fathom’s primary business areas, such as brokerage and title operations. He explained that the update to the deal aims to both reflect these operational advances and acknowledge the significance of the digital assets Neighborhood Intelligence is providing.
The companies discussed several avenues for potential collaboration, suggesting tZero’s digital securities technology could play a transformative role in real estate. Envisioned initiatives involve tokenizing both commercial real estate and single-family rental portfolios, as well as instituting more flexible capital frameworks and new liquidity mechanisms. Integration with title insurance and solutions for homeowners may also develop in the longer run.
The modified agreement offers Fathom flexibility for additional acquisitions to enhance its business, demonstrating Neighborhood Intelligence’s commitment to shifting from its roots as a retailer to becoming a force in home services and real estate markets.
Strategic Redirection and Cancelled Acquisitions
This strategic update follows closely on the heels of Neighborhood Intelligence’s decision to withdraw from acquiring F9 Brands, the owner of Cabinets to Go and Lumber Liquidators. That $150 million transaction was abandoned because “F9 was unable to satisfy all closing requirements within the contemplated timeframe.”
These recent steps align with Neighborhood Intelligence’s efforts to expand past its traditional home retail identity and deepen its involvement in services and real estate. The company has also made acquisitions such as The Container Store and The Brand House Collective (formerly Kirkland’s Inc).
An exact schedule for completing the new Fathom agreement has not been disclosed, and both organizations are refraining from providing further details on the expected closing or status of negotiations.
Should the transaction proceed as planned, Neighborhood Intelligence stands to become the controlling stakeholder in Fathom—reinforcing its evolution toward a tech-powered business model in residential markets.