European private equity firm Cinven announces that it has agreed to acquire Tinsa, a leading provider of property valuation, analysis and real estate advisory services, from Advent International for an undisclosed consideration.
Tinsa, established in 1985 and headquartered in Madrid, Spain, provides appraisals for new and existing mortgages for commercial properties and homes to individuals, banks and direct clients (including SMEs selling premises, real estate investment firms and local authorities). The Group is the largest real estate appraisal firm in Spain and Latin America. It operates in over 25 countries worldwide, in particular, Latin America with offices in Argentina, Chile, Peru, Mexico and Colombia, as well as Portugal.
Tinsa has been leading the market in the development of more accurate and time-efficient proprietary IT solutions for clients, as well as ancillary services including energy audits and property development monitoring. The Group employs 580 people and has a network of around 2,000 valuation experts. It undertakes 300,000 property valuations annually and has around 100,000 clients including over 90% of the Spanish banks.
Cinven's Iberia and Business Services teams identified Tinsa as an attractive investment opportunity based on:
- the business being embedded in its customers' (banks) processes as part of the key risk evaluation assessment for new property loans;
- the tighter regulatory environment which requires property appraisals for new property loans, as well as periodic valuations of banks' own real estate portfolios; new regulation has also created higher barriers to entry;
- client service delivery and operational improvements through further investment in its IT platforms;
- the recovery of the Spanish property market; as well as strong growth expected in its existing Latin American markets (c.20-30% per annum);
- international expansion opportunities including further consolidation in Latin America, the United States and Europe - to diversify outside of Spain; and
- a highly regarded management team led by Chairman and CEO, Ignacio Martos, formerly CEO of Opodo, previously owned by Amadeus (a highly successful Cinven investment); and CFO Juan Guerra.
Commenting on this transaction, Ben Osnabrug, Senior Principal at Cinven, said:"Within Business Services, Cinven looks to acquire companies that demonstrate structural growth, cash generation and defensibility in certain sub-sectors. We are particularly keen on business critical services that are embedded within their clients' own processes - as seen in Cinven's investments in Amadeus and CPA Global. Tinsa perfectly illustrates these characteristics."
"Tinsa presents an excellent opportunity to invest in a highly cash generative market-leading niche BPO provider in Spain, set to benefit considerably from the Spanish market recovery. In addition, we expect to drive growth by further improved operational efficiencies, in particular investment in technology to improve customer service and efficiencies - as well as international expansion, including further consolidation opportunities in Latin America."
Jorge Quemada, Partner at Cinven, added: "Cinven's investment in Tinsa follows the successful acquisition of Ufinet in June 2014. Ufinet has achieved substantial growth in Latin America - which now represents around 50% of Group sales. Since then, we have been looking at businesses with a similar business model to Ufinet: based in Iberia with Latin American, and potentially further international, growth opportunities.
"Tinsa's operations in Latin America are a significant growth driver for the business and complement the Group's solid performance in Spain where there is further upside. We are backing a strong management team at Tinsa and are greatly looking forward to working with them."
Ignacio Martos, Chairman and CEO of Tinsa, commented: "Over the past few years, Tinsa has become one of the largest property valuation businesses in Spain and Latin America. Tinsa is renowned for its proactive, client orientated approach and its multinational footprint. I would like to thank our employees for their continuous commitment during these years and Advent International for the valuable support in aligning our business and positioning it for further growth. Cinven's investment will enable us to continue improving the level and range of services we provide our customers, keeping and extending our IT investments for deployment within their businesses helping our clients to improve the speed and accuracy of their property valuations. I am delighted to be working with Cinven, who share my vision for the Group, and believe that together we can achieve significant growth for the business. "
The transaction is subject to the approval of the anti-trust authority and the Bank of Spain.
Tinsa represents the 16th investment from Cinven's Fifth Fund.
Advisors on the transaction included: Rothschild and Socios Financieros (financial), Clifford Chance (legal advisor to Cinven), Uría Menéndez (legal advisor to Advent), Oliver Wyman (commercial sell-side), McKinsey (commercial buy-side), KPMG (accounting), Deloitte (tax), Garrigues (labour).