Bridgepoint & Cinven Enter The Bid For Tinsa

22 February 2016 – Expansión

Advent International is pushing ahead with its sale of Tinsa, the largest real estate appraisal company in Spain, which the US fund has controlled since 2010. Neither the turbulent start to the year on the markets, nor the political uncertainty enveloping the country, has managed to temper the interest in the operation, which looks set to become one of the major private equity transactions of 2016.

Amongst the candidates for the acquisition are two real heavyweights from the international private equity sector, namely Bridgepoint and Cinven, according to sources familiar with the process, who explain that the sale has attracted significant interest from potential investors, not only in the financial sector but also industry giants. Advent has declined to comment.

The final stretch

The fund, which is led in Spain by Carlos Santana, CEO, and which is being advised by the investment bank Rothschild, launched the sale of Tinsa in January, with a view to receiving initial offers this week.

Now, a select phase of bidding will begin for those candidates who have made the first cut – a group that includes Bridgepoint and Cinven – to allow them to deepen their understanding of the company and refine their bid proposals. If everything goes according to schedule, the bidders will communicate their binding offers by early April, according to sources.

Although the circumstances surrounding the sale of Tinsa are not the most favourable, sources in the sector say that the process is evolving in line with the market’s high expectations, which point to a hard-fought auction with high bids. The total valuation of the appraisal company amounts to around €300 million, according to sources.

This amount represents around ten times Tinsa’s forecast EBITDA for this year. The results for 2015 have not yet been published, but the company is certain that it managed to increase revenues by 12% with respect to 2014, to €86 million and to reach an EBITDA of €20 million, which it expects will rise to around €30 million in 2016. (…).

The US fund Advent acquired its 94.5% stake in the real estate appraisal company in November 2010 (the rest of the capital remained in the hands of the management team) for around €100 million. In this way, it took control of the stakes previously owned by 35 savings banks. At that time, the Spanish property sector was in real turmoil after the burst of the real estate bubble and financial entities were facing unprecedented consolidation and restructuring processes.

To avoid succumbing to that adversity, Tinsa committed itself to international expansion, under the tutelage of Advent. During the period since then, it has acquired Zala in Colombia and Prime Yield in Brazil. Today, Tinsa has offices in Chile, Mexico, Argentina, Peru and Colombia, as well as in Spain and Portugal, and it offers its services in around twenty countries. 20% of the appraisal company’s revenues in 2014 came from overseas, compared with 5% in 2010. At home, the company bought Tasamadrid from Bankia in 2012. (…).

Original story: Expansión (by D. Badía and M. Ponce de León)

Translation: Carmel Drake

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