Tag: Cinven

Hotelbeds Wants To End The Online Agency Duopoly

5 October 2017 – Expansión

The Mallorcan firm Hotelbeds wants to take on the titans of the world of online agencies and break the de facto duopoly, which is effectively dominated by Expedia and Priceline, the parent company of Booking. The company, controlled by the private equity firm Cinven and the fund Canada Pension Plan Investment (CPPI), owns the largest bedbank in the world and after its purchase of Tourico and GTA, is constituting itself as a “clear alternative” to connect hotels and intermediaries, explains Joan Vilà, the Chief Executive of Hotelbeds Group, speaking to Expansión.

“We have undertaken these acquisitions in record time and have almost doubled our size with the purchase of GTA and Tourico. We were already market leaders in terms of our bedbank and our new size puts us in the Champions League of major companies around the world”, says Vilà.

Cinven and CPPI acquired their stakes in the company a year and a half ago, after reaching an agreement with the German group TUI for almost €1,200 million. Since then, the firm has acquired Tourico – based in Orlando and Tel Aviv – and GTA – the commercial name for the Kuoni Group’s travel business, in which the fund EQT owned a stake – for a combined value of €1,300 million.

These acquisitions will allow the group to double in size, with an annual turnover of €7,000 million and a total workforce of 8,300 employees, of which 5,300 belong to the Bedbank division.

For Vilà, the scale of the integrated group will allow the controlled hotels to gain more autonomy. Currently, Hotelbeds works with 100,000 hotels and 64,000 intermediaries (travel agents, tour operators and airlines).

Integration process

Following these operations, the company is now working on its integration plan, which it expects to complete over the next 18 months. “We have decided to use the Hotelbeds platform. Within 18 months we will be working as a single company”.

In terms of strengthening the company’s inorganic growth, Vilà explained that, although he does not rule out making new purchases, the company is focused on the integration process for the time being. The group has not yet decided whether it will work under a single brand. “In the B2B business, the presence of the brand is very important and all three are very well-known”.

In terms of the leadership team, Joan Vilà will continue in his role as the CEO, with Carlos Muñoz as the Director General of Bedbank and responsible for managing the integration of the three businesses, and Andrés García responsible for the financial area of the resulting group. Moreover, Hotelbeds has announced the appointment of José Antonio Tazón as a senior non-executive director on the Board of Directors and as the Chairman of the Advisory Committee.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

RE Broker Aguirre Newman Goes Up For Sale

20 February 2017 – El Confidencial

Spain is experiencing a real estate boom once again and brokers want to take advantage of the situation to make money.

Whilst last year, the private equity fund Cinven acquired Tinsa, the largest appraisal company in the country, and in 2015, Apax Partners took control of Idealista, this year, Santiago Aguirre Gil de Biedma, the brother of Esperanza Aguirre, has decided to put Aguirre Newman, the largest real estate broker in the sector, up for sale.

According to financial sources, Santiago Aguirre has engaged Atlas Capital to sell his majority stake in the consultancy firm. The firm will target both individual and institutional investors, as well as public and private corporations. Aguirre Newman caters for all real estate investment-related matters and offers a complete set of services including valuations, feasibility studies, appraisals, attending compensation boards, leases, property management and technical architectural services.

The company generates annual revenue of around €80 million, with an operating profit of EBITDA of almost €12 million. As such, the financial sources consulted consider that Aguirre Newman could be sold for between €80 million and €100 million. Other sources consider that some of the parties that may be interested in purchasing this real estate broker include the private equity funds Cinven and Apax Partners, which could enlarge the businesses of Tinsa and Idealista, respectively, with this acquisition.

However, the same sources also consider that this could be a good opportunity for some of the main domestic competitors, which would result in a certain degree of concentration in what is a very fragmented sector. In addition to Aguirre Newman, the other large consultancy firms include CBRE, Knight Frank, JLL, BNP Paribas Real Estate, Cushman & Wakefield and Savills. These seven firms account for 90% of the sector’s revenues in Spain and employ 2,200 professionals in total. Almost 400 people work for Santiago Aguirre and his minority shareholder partners.

Low interest rates, the collapse in prices following the crash, the enormous volume of liquidity and the recovery of the Gross Domestic Product (GDP) in Spain have created a cocktail that has led to investment figures not seen since the era of the bubble. According to a report from JLL, non-residential real estate investment (offices, retail, logistics and hotels) amounted to €8,707 million in 2016. That figure represents a decrease of 8% compared to 2015, when operations worth €9,407 million were closed. Nevertheless, the figure recorded in 2016 was still higher than the maximum recorded in 2006 (€7,800 million).

Golden years

Last year, the most active market in terms of investment volume was the retail premises and shopping centre segment (retail), with €2,977 million, down by 3% compared to 2015. (…). Moreover, Aguirre Newman highlights that this figure exceeded the €2,000 million threshold for the third year in a row, which is clear proof of the boom in the real estate sector, especially in retail, which accounts for 35% of all tertiary investment.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake

Cinven Completes Purchase Of Tinsa For c. €300M

8 August 2016 – Expansión

The European investment fund Cinven has completed the purchase of the real estate appraisal company Tinsa, after it received approval for the deal from the Competition authorities and the Bank of Spain. Sources in the sector value the acquisition at around €300 million.

Original story: Expansión

Translation: Carmel Drake

Hotelbeds Borrows To Finance Its Own Purchase (By Cinven & CPPIB)

8 June 2016 – Expansión

Hotelbeds has had new owners for just over a month. At the end of April, the private equity firm Cinven and the Canadian fund CPPIB won the bid opened by TUI to sell the Spanish travel services supplier. They put a joint offer on the table, valuing the company at €1,165 million, which exceeded all of the other bids. Now, they are holding negotiations regarding how they will pay that price.

All indications suggest that the target company will end up paying a large portion of the bill itself, in a debt operation that is typical in private equity acquisitions. According to several financial sources, Hotelbeds is in conversations with seven banks to obtain financing, including a syndicated loan amounting to €490 million and a line of credit amounting to another €150 million.

BBVA, Morgan Stanley, HSBC, UniCredit, Deutsche Bank, Bank of Ireland and Mizuho are the entities participating in the syndicate, which is expected to be closed within the next few days and whose fruits will be used to pay for some of the acquisition.

Neither the purchaser nor the vendor has provided details about how much of the €1,165 million value assigned to Hotelbeds will be paid for in debt and how much will be paid for in cash, but some of the parties involved implied that the latter will account for more than half of the total price. Using that reference and the fact that Cinven and CPPIB are not purchasing 100% of the company, rather some of its shares will remain in the hands of the travel services supplier’s management team, then it seems likely that the €490 million syndicated loan will cover a significant part of the total financing.

Hotelbeds will pay at least 500 basis points (5.5%) above Euribor for the syndicated loan, which will have a seven year term, according to financial sources. That spread was the maximum established to begin negotiations, so it may decrease, depending on the banks’ appetite and the conditions offered by the company.

The same thing will happen with the €150 million line of credit. In that case, the term will be six years and the minimum spread will amount to 450 basis points, but the definitive conditions will not be agreed until the negotiations have been finalised. (…).

Hotelbeds’ financial results work in its favour with respect to its negotiations with the banks, according to financial sources. The supplier works with 75,000 hotels in 180 countries and recorded a turnover of €1,200 million in 2015 and an EBITDA of €117 million. In addition to hotel rooms, the company also manages transfers, trips and corporate events.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Cinven Offers €1,300M To Outbid EQT In Auction For Hotelbeds

27 April 2016 – Expansión

The private equity firm Cinven, which has invested heavily in Spain over the last two years, may take a leap forward if its bid for the Hotelbeds group goes ahead. TUI AG put the company up for sale at the end of 2015.

Sources close to the sales process indicate that Cinven has put an offer on the table, which values the tourism company at €1,300 million. The Nordic fund EQT is also participating in the bidding and sources do not rule out the possibility of other interested groups participating in what now seems to be the final stretch of the sales process of the Hotelbeds Group.

The company, a subsidiary of the Germany group TUI AG, works with 75,000 hotels all over the world and offers rooms to tour operators and travel agents around the globe. Hotelbeds, which receives more than 25 million hotel bookings per year, is one of the companies that emerged from the tourism sector thanks to new technologies and it has high growth projections.

Entry into the hotel segment

This would be Cinven’s first major foray into the hotel segment, but it would represent a return to the tourism business. Cinven, a fund headquartered in London, was created in 1977; it went on to acquire Amadeus in 2005, together with BC Partners.

The tourism sector’s technology provider, which was acquired from the major European airlines, was then delisted. In 2010, Cinven and BC Partners returned the company to the stock exchange and sold their shares.

Since its creation, Cinven has made acquisitions amounting to more than €70,000 million, specialising, above all, in investments with a significant technological component and always with holdings that exceed €100 million. (…).

Meanwhile, Hotelbeds has been on the market since last Autumn. Financial sources valued it at around €1,000 million. TUI had hoped to complete the sales process during the first three or four months of the year, and so a final agreement could be very close. Nevertheless, the emergence of the fund EQT in the process will intensify the Hotelbed operation.

Similarly, financial sources do not rule out that other funds may be preparing their own competitive offers.

Diversified portfolio

EQT, of Swedish origin, has assets under management of €29,000 million and its investment portfolio is very varied. In Spain, it holds stakes in two companies, Islalink and Parkia, which operate in the telecommunications and car park sectors, respectively.

EQT opened an office in Madrid in the middle of last year with the aim of looking for new investments in the Spanish and Portuguese markets. The fund hired a specialist team led by Fernando Conte, the former Chairman of Iberia and the tourism group Orizonia.

At the beginning of February, EQT bought the Swiss tourism group Kuoni for more than €1,100 million and, according to sources in the sector, it plans to integrate that business with the Hotelbeds Group.

For TUI AG, the sale of this company will mean saying goodbye to the online sector to focus on its traditional businesses: hotels and cruises. During the year to 30 September 2015, TUI AG generated revenues of more than €20,000 million, with an EBITDA of €1,069 million, up by almost 23%. Its shares closed at €13.09 on the stock exchange yesterday, up by 0.47%.

Original story: Expansión (by M.Á.Patiño and Y.Blanco)

Translation: Carmel Drake

Cinven Buys Tinsa From Advent International

7 April 2016 – El Mundo

The European private equity house Cinven has signed an agreement to purchase the appraisal company Tinsa from Advent International, which acquired the firm in 2010 for €100 million. The consideration to be paid this time around has not been disclosed. The appraisal company was put up for sale at the beginning of 2016 and since then experts have speculated that the company could be sold for up to €350 million.

Tinsa, created in 1985 and headquartered in Madrid, is the largest property valuation and real estate advisory services company in Spain and Latin America, and performs mortgage appraisals on all kinds of properties, including tertiary and residential assets.

Currently the appraisal company operates in more than 25 countries around the world, with a strong presence in Latin America and dedicated offices in Spain, Portugal, Argentina, Chile, Perú, México and Colombia.

Cinven highlights Tinsa’s in-house technology, which is at the forefront of the market and allows it to offer accurate and efficient valuation solutions to its clients, as well as complementary services, such as energy audits and the monitoring of property developments.

Tinsa has 580 employees and a network of around 2,000 appraisal experts. The company performs more than 300,000 appraisals per year around the world and has more than 100,000 clients, including more than 90% of Spain’s banks.

Cinven also highlights that Tinsa is integrated into the process of its main clients, the banks, and that it plays a key role in the risk assessment process for granting new mortgages. In addition, Cinven indicates that the current onerous regulatory context requires properties to be appraised before any new mortgages can be granted, and imposes periodic valuations of banks’ real estate portfolios. (…).

Moreover, Cinven will inherit Tinsa’s strong management team, led by its Chairman, Ignacio Martos, formerly the CEO of Opodo, the portal that used to be owed by Amadeus, and by its Finance Director, Juan Guerra. (…).

Tinsa represents Cinven’s sixteenth investment through its Fondo 5. Advisors to this operation have included Rothschild y Socios Financieros (financial advisors), Clifford Chance (Cinven’s legal advisor), Uría Menéndez (Advent’s legal advisor), Oliver Wyman (Advent’s commercial advisor), McKinsey (Cinven’s commercial advisor), KPMG (accountant), Deloitte (tax) and Garrigues (employment law).

Original story: El Mundo

Translation: Carmel Drake

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