21 December, Milano Finanza
The negotiations between doBank and Altamira are at an advanced stage. According to El Confidencial, doBank, the financial company operating in NPL management and collection on behalf of banks and companies, is about the close a deal concerning the purchase of the leading Spanish servicer, Altamira, the former platform of Banco Santander. The platform is owned for 85% by funds such as Apollo, CPPIB and ADIA and 15% by Santander.
doBank is allegedly the favourite candidate to acquire the company after that Intrum withdrew from the competition to focus on Solvia, the NPL platform of Banco Sabadell. While the funds are open to selling, it’s still not clear whether Santander will also sell its holdings since Altamira manages a part of its assets. Altamira operates in Portugal, Cyprus and Greece, where doBank has recently won a servicing mandate concerning NPLs for 1.8 billion euro.
In 2017, Altamira had 700 employees and an NPL stock of about 50 billion euro backed by over 82,000 real estate assets. Moreover, it had about 15 long-term clients, including Santander and Sareve (the NPL national fund) representing approximately 30% of its assets under management. Nine billion of the assets under management are located abroad, mainly in Portugal (Oitante, 1.5 billion euro) and Cyprus.
The rumours talk about an offer for 500-550 million euro, although the initial estimate was for 600 million, for a player with assets under management for 55 billion between non-performing loans and real estate assets. As stressed by Equita in its analysis, the estimated purchasing price might be lower than the amounts generally paid for the Italian platforms, although it refers to a more mature market.
As the analysts estimate, “we don’t know the financial data of Altamira, but assuming fees are lower than in Italy, we estimate Altamira might generate at Ebitda of approximately 45 million euro”. At this stage, the leverage will reach the maximum level set in the business plan, namely three times the net debt/Ebitda ratio, or slightly over.
According to the Equita analysts, the acquisition of Altamira might have a strategic relevance since it will allow doBank to the enter the Spanish servicing market (NPLs for over 200 billion between primary and secondary market) with a leading position and to enter interesting countries such as Cyprus and Portugal, without the need to acquire local platforms. Banca Akros adds: “it would be a significant step forward in the doBank’s three-year business plan. It will allow the company to enter primary markets, as Spain and Portugal, re-leveraging the accounts”.
However, Equita warns that “the risks might be very high and the potential synergies with Italian activities very limited”. Equita confirms its hold rating and the target price of 11.60 euro, while the rating by Banca Akros is to buy and a target price of 12.50 euro. The doBank shares reported a -2.21%and are traded at 8.85 euro after the company announced yesterday to have obtained a mandate from Iccrea as a special servicer as well as a master servicer for an NPL portfolio of a book value equal to 2 billion euro, 70% of which secured.
The portfolio is composed of 10 thousand holdings (the average book value is 200 thousand euro). The operation is aligned with growth trend reported by the company already in the first semester of 2018, after having won three mandates for NPL amounting to over 3 billion (with completed operations for 2.7 billion with Banca Agricola Popolare di Ragusa, Carige and Iccrea).
The Equita analysts say that “thanks to this deal, our estimate concerning deals in 2018 equal for over 17 billion is almost achieved”. “The news is definitely positive, as it improves the 2019 outlook, and it shows how the company can successfully meet its targets”.
Source: Milano Finanza
Translator: Cristina Ambrosi