19 October 2017 – Expansión
The luxury real estate construction sector is retaining its shine. One of the property developers that survived the previous cycle, Levitt-Bosch Aymerich, is on the verge of changing hands. A consortium of American investors, led by the fund Baupost Group, is holding exclusive negotiations to purchase the property developer that specialises in luxury homes, which has a market capitalisation around €200 million.
Sources in the sector explained to Expansión that the operation is in the due diligence phase (the assets are being audited) and that, although no agreement has been reached yet, the operation may be closed soon if the negotiations continue.
Baupost will team up with a local operating partner, Alpine Grove, for the operation. The advisors on buyer include PwC and the law firm Garrigues, on the legal side. Meanwhile, Deloitte Legal is the legal advisor on the sell-side.
According to the latest available information from the Mercantile Register, Levitt-Bosch Aymerich’s net equity amounted to €162 million at the end of 2016. The company recorded a turnover of €61 million and an attributable net result of almost €6 million. Besides Baupost, several other US investment funds that are very active in Spain also submitted bids for Levitt. In this way, market sources indicate that Lone Star, Värde and Castlelake all expressed their interest in the company over the last 12 months.
Levitt, founded in 1929, with the construction of a luxury residential development in New York, arrived in Spain in 1971 with the help of José María Bosch Aymerich, who died in 2015.
In 1973, the company undertook its first development on the Monteclaro urbanisation on the outskirts of Madrid. Since then, it has constructed several high-end developments in Madrid and Barcelona, as well as some office complexes.
In this regard, in October 2014, the company sold five office buildings in Madrid to Merlin for €130 million in order to focus on its residential business.
The firm is currently working on some developments in Valdemarín (Aravaca), in one of the most exclusive areas of Madrid as well as on the El Juncal urbanisation in Alcobendas, amongst others.
If this deal is closed in the end, it will join the fever of property developer sales that has been happening in Spain in recent years. Examples include Lone Star, which purchased Kutxabank’s real estate subsidiary Neinor in 2014 for €930 million. Also, in February, Värde acquired Vía Célere for €90 million and merged it with DosPuntos – the former real estate subsidiary of the SanJosé group -. In addition, that same fund purchased Aelca from Grupo Avintia for €50 million in June 2016.
Meanwhile, Castlelake, which started to back the Spanish housing market back in 2013 with the purchase of land, launched Aedas Homes just a year ago. Other investors are also backing the market through agreements with local groups to build homes, such as the case of Morgan Stanley and Gestilar, and Green Oak and Ibosa, amongst others.
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake