The company that used to be Bed Bath & Beyond wants to take control of a national real estate brokerage, and it intends to pay for it largely with its stake in tZERO, a digital-securities company.
Fathom Holdings Inc. and Neighborhood Intelligence, Inc. said on Sept. 24 that they have agreed to explore a restructured deal that would scrap the merger agreement they signed on June 16 and replace it with something structurally inverted. Instead of Fathom shareholders receiving Neighborhood stock, Neighborhood would hand Fathom a portfolio of digital assets and receive newly issued Fathom shares β enough, the companies said, for Neighborhood to hold a controlling interest in the brokerage afterward.
The announcement carries a Nashville, Tenn. dateline and was issued after the close of trading.
What is actually changing hands
Neighborhood would contribute three things: an approximately 38.8% direct and indirect ownership interest in tZERO Group, Inc., its Medici-related fund assets, and its direct investment in GrainChain, Inc.
The companies said the transaction “would ascribe no less than $130 million in value” to that package, driven principally by the tZERO stake β but with an important qualifier attached in the release itself: the figure is subject to Fathom’s validation of the valuation during due diligence and to the negotiation of definitive agreements. The final number of Fathom shares issued has not been set.
The original June agreement would have gone the other way. Under it, Fathom shareholders were to receive 0.2236 shares of Neighborhood common stock for each Fathom share. That agreement would be terminated once definitive documentation on the new structure is signed.
Neighborhood Intelligence trades on Nasdaq as NXH and was previously Bed Bath & Beyond, Inc. Its portfolio, per the release, includes Bed Bath & Beyond, Overstock, buybuy BABY, Kirkland’s, The Container Store, Elfa and Closet Works, alongside home services and home ownership businesses. Fathom (Nasdaq: FTHM) describes itself as a national, technology-driven real estate services platform spanning residential brokerage, mortgage, title and software, with brands including Fathom Realty, Encompass Lending, intelliAgent, Real Results, MHG and Verus Title.
Why each side says it wants this
Marcus Lemonis, executive chairman and chief executive of Neighborhood Intelligence, described the deal as an exercise in making illiquid holdings visible. “Our commitment was to find a way to take assets we believe have tremendous value, but whose value can be difficult for the market to see on our balance sheet, and translate them into a more transparent and trackable public equity stake,” he said in the release.
Lemonis also addressed the obvious arithmetic problem directly. “It is important to recognize that the value of the Transaction is not derived from Fathom’s current market capitalization,” he said. “While Fathom’s share price is below where it was when our original transaction was announced, we believe its brokerage and title businesses have made meaningful progress during that same period.”
Scott Flanders, chairman of Fathom Holdings, put the brokerage’s contribution in operating terms. “Fathom brings a national brokerage business, a title platform and real transactions to this proposed combination,” he said. “We believe the proposed structure recognizes the progress of our existing businesses while bringing significant new assets and a controlling strategic shareholder to Fathom.”
The real estate use case, as described
The companies said they see real estate as “a natural application for tZERO’s digital securities infrastructure,” naming potential tokenization of commercial real estate and single-family rental portfolios, more flexible capital structures and new liquidity pathways, with title services and individual homeownership as later possibilities. Those are stated intentions, not committed products.
The two also contemplate a long-term data sharing and commercial agreement meant to lower customer acquisition costs across brokerage, title, mortgage and other home services. Connectivity to Beyond Credit Union, which the companies announced Sept. 15, is expected to supply mortgage and financial products under what the release calls a more asset-light model.
What has to happen first
Nothing is signed. The release says the transaction remains subject to definitive agreements, Fathom board and stockholder approvals, Neighborhood board approval, an independent fairness opinion, regulatory and third-party approvals, and compliance with the Investment Company Act of 1940, the statute that can force a company whose balance sheet is dominated by passive investment holdings to register as an investment company. The companies added the standard caution that there is no assurance the transaction will be entered into or completed on these terms at all.
The proposal lands in a year of consolidation among brokerages taking more conventional shapes: Real completed its takeover of RE/MAX in August, and HomeSmart merged with NorthGroup Real Estate to add nearly 2,000 Southeast agents. Those deals bought agents and market share. This one would buy Fathom a balance sheet asset and a new controlling owner, and leaves the operating logic to be proved later.
