Permira to Sell Student Residences at the Universidad Europea

July 2019 – Richard D. K. Turner

The venture capital fund Permira announced that it would sell two student residences at the Universidad Europea, after having acquired the US group Laureate’s assets in Spain and Portugal at the end of last year. The fund is looking to raise 100 million euros with the sale.

The two student housing blocks are named Leonardo Da Vinci I and II and are located in the European University’s main campus, in Villaviciosa de Odón, just outside of Madrid.  The two residences can house up to 528 students and have a heated pool and gym.

Original Story: Cinco Dias – Álvaro Bayón / Pablo Martín Simón

CVC to Purchase the Universidad Alfonso X for c. €1.1bn

26 March 2019 – El Confidencial

Following Permira’s acquisition of Universidad Europea de Madrid in December for €770 million, CVC Capital Partners is following suit. The private equity firm is on the verge of completing negotiations to buy Universidad Alfonso X El Sabio (UAX), also in Madrid.

The consideration for the operation could amount to €1.1 billion, equivalent to 14 x EBITDA, an investment record that reflects the huge interest in the sector from private equity firms.

The main shareholders of UAX are Jesús Núñez, who owns a 72% stake and Manuel Piñera Gil Delgado, who owns 15.67%, together with his ex-wife María Teresa Gallego García, heir of the alcoholic beverage company DYC. Another 7% is owned by their nephew José Jaime Núñez.

Currently, the most significant investments owned by CVC Capital Partners in Spain are its 20% stake in Naturgy, worth €3.8 billion, which it shares with Corporación Financiera Alba; its 25% share of CLH worth €1 billion; Deoleo, the olive oil company that is facing serious financial problems; and Lecta, formerly Torraspapel.

Jesús Núñez created UAX in 1993 after reaching an agreement with the Town Hall of Villanueva de la Cañada, which granted him the right to use 1 million m2 of land for 75 years on which to build the campus. The university now educates 15,000 students per year, generates a turnover of €104 million and makes a net profit of €45 million.

Original story: El Confidencial (by Agustín Marco)

Translation/Summary: Carmel Drake

Permira Buys Laureate Education’s Portfolio of Universities in Spain & Portugal for €770M

12 December 2018 – El Confidencial

The fund Permira has purchased a portfolio of institutions in Spain and Portugal from the company Laureate Education, which owns the Universidad Europea de Madrid and is a specialist in the university sector, for €770 million.

In a statement, both parties detailed that, in addition to the Madrilenian branch, the transaction includes the campus of the Universidad Europea in Valencia and the Universidad Europa de Canarias, both in Spain, as well as the Portuguese Universidade Europeia in Portugal and the Portuguese Institute of Marketing Administration.

The most senior executive of Laureate, Eilif Serck-Hanssen, said that he feels “very proud of our institutions in Spain and Portugal and of what they have achieved”. Moreover, he considers that under the umbrella of the fund Permira “they will be well positioned and supported” to continue offering high satisfaction to students.

The head of Permira in Spain, Pedro López, said in a statement that these schools “will maintain their focus on high-quality education and on offering new and innovative educational experiences”.

The transaction is expected to be completed during the first half of 2019, although it is subject to approval by the competition authorities and educational agencies.

Original story: El Confidencial 

Translation: Carmel Drake

Cortefiel’s Founder Lists Its Socimi Inmofam 99 On The MAB

21 December 2016 – Expansión

The Hinojosa family has listed its real estate Socimi Inmofam 99 on the stock market. The company primarily owns retail premises worth around €48 million.

Another Socimi will debut on the Alternative Investment Market (MAB) today (21 December) – Inmofan 99 will be the twenty-sixth Socimi to join the market and will do so with a portfolio worth €48.05 million.

Although the name of the company may not be well known, one of the most representative families in the Spanish fashion world is behind this Socimi: the Hinojosa family. The founders of the Cortefiel group, which owns the brand of the same name, as well as Springfield, Women’s Secret, Pedro del Hierro and Fifty Factory, have decided to convert their real estate company into a Socimi and whereby benefit from the tax advantages afforded by this type of investment vehicle.

Founded as a limited company in June 1999, Inmofam has focused its activity on managing the real estate assets of the Hinojosa family. In September 2015, the company converted itself into a Socimi and 14 months later it is debuting on the stock market with a market capitalisation of €38.83 million.

Diversified portfolio

Inmofam 99’s portfolio comprises a batch of stores that the Hinojosa family held onto after selling the Cortefiel textile group to the funds CVC, PAI and Permira in 2005. The nine assets are leased to the textile group that they founded: six of them are Cortefiel stores, two are Springfield stores and one is a Women’s Secret shop. The stores are located in Madrid, La Coruña, Oviedo, Las Palmas de Gran Canarias, Málaga, Valencia, Zaragoza and two in Valladolid.

In December 2004, the company bought its real estate jewel, a 2,620 m2 store located on Calle Raimundo Fernández Villaverde, which is one of the most iconic stores of the Cortefiel brand in Madrid.

The Hinojosa and García-Quirós families (which have been related for years) receive rental income of more than €883,000 for this store. Nevertheless, Cortefield has notified the Socimi of its decision to terminate the rental contract from 31 December, which has led Inmofam to update its value for this property to €11.75 million.

The other eight retail premises are worth between €2 million and €7.1 million. The former relates to a store on Calle Zorrila in Valladolid, which Cortefiel will also vacate at the end of the year, which has been taken into account in its valuation. Moreover, it owns several floors, for residential and office use, in Oviedo.

In 2005, the Hinojosa and García Quirós families sold the Cortefield textile group to the funds CVC, Permira and PAI for €1,440 million. Currently, Joaquín García-Quirós Rodríguez chairs Inmofam and Juan Hinojosa Vacas, Almudena Hinojosa Bermejo, Gonzalo Hinojosa Fernández-Angulo and Dario Hinojosa García-Puente complete the Socimi’s Board of Directors.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Four Investors Compete In CaixaBank’s Nursing Home Sale

20 May 2016 – Expansión

There are four players in the race to purchase the Amma residences. The private equity giant Pai Partners and the Maison de Famille, Emera and Armonea groups are the candidates that have made the first cut in the acquisition process and, therefore, will battle the critical bid to acquire the nursing homes and day centres controlled until now by CaixaBank, according to sources familiar with the process.

The four investors have already performed detailed due diligence of the assets with a view to presenting a binding offer, say sources in the market, and they have until “next week” to submit their final proposals. The initial prices valued the nursing homes at around €200 million.

This amount represents just over ten times the company’s EBITDA in 2015, which amounted to €18 million, according to industry estimates. Meanwhile, its total revenues amounted to almost €100 million. Although CaixaBank is the owner of almost 70% of the shares, the sale affects 100% of the capital, because the minority owners (the Caja Duero corporate business group, Grupo Norte, Inverduero, Kintoa, Uve, Bella Castilla and Horizontes de Castilla) are also willing to transfer their stakes, according to financial sources.

Given the identity of the potential investors, industrial players are prevailing in the transaction, which was launched at the beginning of the year. The majority of the candidates of a financial nature who participated in the sales process – which included the fund Permira, amongst others – have been excluded, and all of the parties involved in the final round of bidding have prior experience in the sector. (…).

Consolidation in the sector

The sale of the Amma Group, which is scheduled to be closed before the summer, is another sign that the effervescence of transactions in the nursing home sector in Spain is continuing to peak.

Last year, three significant operations were closed: as well as the sale of Geriatros (to Pai Partners), SARquavitae purchased Novaire and the Spanish private equity fund Portobello took control of Vitalia Plus. So far in 2016, BBVA is immersed in a process to sell off Sanyres. And financial sources confirm that Gala Capital has begun the divestment of Geroresidencias La Saleta, a company that it inherited from the portfolio of Ahorro Corporación’s private equity manager.

The appeal of the nursing home sector, whose total turnover amounts to €4,000 million per year, is due to the rosy forecast for revenue growth that the accelerated aging population is causing and the shortage of available places in care centres for the elderly. The possibilities for consolidation that results from the fragmentation of this market is another significant factor that is stirring up the industry.

The Amma Group, with a staff of 2,800 professionals, manages 30 nursing homes and 27 day centres in Spain, with the capacity to serve more than 5,500 users across eight autonomous regions: Madrid, Cataluña, Navarra, Castilla y León, Castilla-La Mancha, the Canary Islands, Cantabria and Murcia.

Original story: Expansión (by Mamen Ponce de León)

Translation: Carmel Drake

Deutsche Bank Injects €150M Into Aktua Ahead Of Its Sale

17 November 2015 – Expansión

Aktua is up for sale. Banesto’s former real estate arm was acquired by the US fund Centerbridge in 2012, at the height of the financial crisis.

Now, more than three years later, it is time to capitalise on that operation in an economic scenario that is very different from the one seen in 2012; but before completing the transfer, Centerbridge has been “adorning” Aktua so that the operation closes in the best possible way for the firm. In this way, it has undertaken a comprehensive reorganisation of the company’s financial structure.

To achieve this, Centerbridge has not resorted to traditional channels. It was not averse to that option and in fact, it was there that it took its first steps, but the offer of a direct loan then crossed its path. “Aktua received financing offers from several commercial banks, but then one entity offered it a different structure, which was interesting as it allowed more leverage”, says a financial source.

That entity was Deutsche Bank, but not the bank’s commercial banking division, rather its direct lending team. And that offer changed the plans for Aktua. Centerbridge accepted the offer and the result has been an injection of €150 million in funding, which has been used to refinance the company’s debt and also to enable the owner to recover some of the investment it made in 2012, and to pay a dividend, according to several market sources.

In this way, the money that Centerbridge receives from the sale of Aktua will not be the only return it generates from the operation.

Sharing the risk

The direct loan was structured in two tranches, one amounting to €100 million and the other amounting €50 million, both with a 7-year term, something that is not that easy to find amongst the traditional banks. The first loan was signed between Deutsche Bank and Aktua at the end of May, but that was just the beginning – since then, the financing structure has been evolving. With the money now in the coffers of the recipients, Deutsche Bank has gone one step further and has decided to retain title over the entire second loan tranche, but to syndicate out the first €100 million tranche and whereby share the risk with other entities. Santander, Sabadell and Bankinter all responded to the call and so now the financing is shared between those four entities.

All of them will receive 300 basis points above 3-month Euribor for the €100 million first loan tranche. The €50 million tranche that Deutsche continues to hold has different costs and conditions associated with it.

This operation represents the launch of Deutsche Bank’s direct lending business in Spain. And the debut has been conducted in style: the €150 million injection makes the loan to Aktua the first in the list of the largest transactions performed by the banks so far in 2015.

Meanwhile, Centerbridge is now handling the second phase of the operation, namely: the sale of Aktua. It has engaged the investment banks Barclays and Bank of America Merrill Lynch to coordinate the sale, alongside the law firm Linklaters. According to Reuters, Aktua is worth around €300 million and its sale has sparked interest amongst several international venture capital funds, including the British fund Permira.

Original story: Expansión (by Inés Abril)

Translation: Carmel Drake

Centerbridge To Sell Property Services Firm Aktua

30 October 2015 – Reuters

U.S. private equity group Centerbridge Partners has appointed investment banks to sell Spanish property services firm Aktua, five sources familiar with the matter said.

Centerbridge is seeking to take advantage of an improvement in the Spanish property market where valuations of real estate assets are recovering after taking a hit during Spain’s economic downturn.

The New York-based fund has hired Bank of America and Barclays to launch a sales process for the company which offers a wide range of real estate services including property maintenance, rental collection and loan management, the sources said. Bank of America and Barclays declined to comment while Centerbridge had no immediate comment.

Aktua is expected to have core earnings of between €40 million and €50 million this year and could be valued at around €300 million ($329 million), or 7 to 7.5 times its earnings before interest, tax, depreciation and amortization (EBITDA), two of the sources said.

The company, which employs more than 400 people in Spain, has already drawn interest from a series of international buyout funds including London-based Permira, another source said.

Permira, which is in the process of selling two of its Spanish portfolio companies, Cortefiel and Telepizza, declined to comment.

The sale of Aktua has yet to start but bidders are already lining up to examine the asset and its growth potential, the sources said.

Real Estate Rebound

Aktua has roughly €5 billion of assets under management of which €2.4 billion are real estate assets and the rest loans.

Based in Madrid, it makes an attractive consolidation platform for private equity firms which could adopt a so-called buy and build strategy and combine it with other Spanish property management firms, the sources said.

This would generate a flurry of deals giving U.S. investors, which swooped on low-priced Spanish real estate assets during the financial crisis, an opportunity to capitalise on Spain’s economic rebound.

Real estate prices dropped by more than 35 percent in Spain between 2007 and 2014, according to the National Statistics Institute.

Centerbridge broke into the Spanish market in 2012. It paid €100 million to buy Aktua from Spanish bank Banco Español de Credito (Banesto).

Other U.S. investment firms could go down the same route and divest property firms they’ve held for the past three years, one of the sources said.

In 2013, New York-based buyout firm Apollo bought 85% of Santander’s property management unit Altamira for €664 million.

Another Spanish bank, La Caixa, sold 51% of its real estate services arm, Servihabitat Gestión Inmobiliaria, for €185 million in 2013.

Original story: Reuters (by )

Edited by: Carmel Drake