Tag: Tasamadrid

Charme & Miura Finalise Purchase Of Valtecnic & Ibertasa

25 May 2017 – El Confidencial

A major new operation is brewing in the property appraisal sector in Spain. The private equity firms Charme Capital Partners and Miura Private Equity are about to close the purchase (to acquire a majority stake) of the appraisal companies Valtecnic and Ibertasa, according to sources close to the operation. Some finishing touches still need to be completed, such as obtaining approval from the Bank of Spain.

Charme and Miura are joining forces to acquire these two real estate services firms, which will continue to operate independently in the domestic market. In other words, the investment funds will co-invest in and take control of both companies, but will not merge them. In addition, the management teams of the two appraisal companies will continue at the helm as well as in their roles as minority shareholders.

Last year, Charme came very close to acquiring Tinsa, the largest company in the property appraisal sector in Spain, but that firm ended up being purchased by another private equity firm, Cinven, which paid Advent €300 million. Meanwhile, Miura invested in Group BC through its first fund until the end of 2015 – that company is dedicated to the outsourcing of services from financial institutions (mortgage advisory, recoveries…).

These operations represent the indirect entry of private equity firms into the real estate sector and their clear commitment to an upwards cycle. According to data from the Spanish Association of Value Analysis (AEV), the number of property appraisals grew by 13% during the first quarter of 2017, to 228,879 in total, worth €75,620 million, up by 3.1% with respect to the same period a year earlier. (…).

The number of appraisal companies has been cut in half

The appraisal sector was hit hard by the burst of the real estate bubble although, like in the property development sector, to the extent that the mortgage activity is resuming, so the volume of appraisals is also showing signs of recovery. Nevertheless, the crisis took a serious toll and led to the disappearance of lots of companies. Whilst in 2011, there were 58 appraisal companies, by the end of 2016, that figure had fallen to 37.

Nevertheless, in recent years, several companies, above all in the real estate consultancy sector, have broken into this market with their own appraisal businesses. Such was the case of CBRE Valuation Advisory, Aguirre Newman Valoraciones and UVE Valoraciones in 2011. More recently, another consultancy firm, JLL, obtained approval from the Bank of Spain for its appraisal business, which operates under the JLL brand.

Valuations

On the other hand, like in the property development sector, the activity of the appraisal companies has not been without controversy, especially for the role that they played in the real estate bubble. The appraisal companies have been repeatedly accused of producing inflated appraisal values at the height of the boom and of continuing to do so even in the face of a depressed market.

In addition, concerns regarding the transparency and independence of these entities caused the Bank of Spain to force the banks and savings banks to disassociate themselves from the appraisal companies in terms of ownership. That decision resulted in the disappearance of several players, such as Tabimed (Banco Sabadell) and TVG (Abanca). Others changed activity, such as Sivasa (Banco Santander), whilst others still, such as Tasamadrid (Bankia), were sold.

Original story: El Confidencial (by E. Sanz)

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