Retail, Consumer & Leisure

Country Spain
Sector Retail, Consumer & Leisure
Deal type Buyout
Investment date November 2010
Status Realized investment
Exit method Sale to Cinven (August 2016)

Tinsa is Spain's largest property valuation and advisory services provider. Established in 1985 and headquartered in Madrid, the company today has over 600 employees and a network of around 2,000 valuation experts across 25 countries worldwide. It completes approximately 300,000 commercial and residential property valuations every year for some 100,000 clients, including more than 90& of Spain's banks.

After careful assessment, Advent International acquired Tinsa in 2010 from its bank shareholders at what appeared to be the bottom of Spain's housing market. As one of the hardest hit European countries in the wake of the financial crisis, Spain subsequently fell into a double-dip recession, which adversely impacted the mortgage origination market and, therefore, demand for property valuations. We estimate that between 2010 and 2015 Spain's mortgages origination contracted by circa 64%. To offset lower demand for Tinsa's services in its home market during this second economic contraction, we focused on a three-pronged strategy.

The first initiative was to develop a new client base amid a sweeping restructuring of Spain's savings banks, who were Tinsa's previous shareholders, and constituted the majority of its clients. We built a new sales department to create a client-oriented structure and diversify Tinsa's customer base.

Second, significant operational efficiencies were made: (i) significant reduction in appraisers' tariffs through rejuvenating the appraiser pyramid, and negotiating volume discounts; (ii) investment of c. €11m in IT to automate the whole appraisal process and materially improve productivity. Additionally, this investment reinforced its proprietary infrastructure and improved client service and customer switching costs; (iii) other fixed costs reduction. As a result of these operational efficiencies programme, EBITDA margin improved from 14.5% in 2010 to 24.0% in expand its strong market position and customer relationships.


Third,  Tinsa focused efforts on developing its Latin America business, just as the continent was showing impressive economic growth. Revenues from the region grew by a CAGR of 22% between 2010 and 2015 to €16.3m, and went from accounting for around 7% of the group's revenues to 19% over the same period. Margins in the LatAm business also more than doubled to almost 25% over the same period. This growth came from both organic expansion, and acquisitions in Colombia and Ecuador.

None of this would have been possible without committed, steadfast leadership. To successfully reinvigorate the business Advent enhanced the company's senior management team. This included the appointment of Gerardo Arostegui, the former CEO of Aviva Spain, as Chairman and in 2014 Ignacio Martos, an Advent Industry Advisor, was brought in to assume both Tinsa's Chairman and CEO roles.

"Over the past few years, Tinsa has become one of the largest property valuation businesses in Spain and Latin America," said Martos. "The company is renowned for its proactive, client-oriented approach and its multinational footprint. Advent International gave us valuable support in aligning our business and positioning it for further growth."

Martos was instrumental in Tinsa's growth during the final years of our investment, bringing to bear his considerable operational and IT expertise, honed from his experience as founder and later, CEO of online travel agencies Rumbo and Opodo.


All of these measures mitigated what was a challenging market environment and ultimately led to strong cash flows over the holding period.

The success of this ambitious operational strategy was evident in the company's financial results for 2015, Advent's last year of ownership: group revenue was up 10% to €86.3m and EBITDA rose by 24% to €20.7m.

Recognizing Tinsa's market-leading position in Spain and Latin America and the business-critical nature of its service offering, supported by stricter regulatory requirements applied to banks' real estate portfolio valuations, Cinven acquired the business from us in April 2016, at which point its enterprise value had tripled since our investment six years prior.

"Tinsa went through an impressive transformation and the management team, in partnership with Advent, did an excellent job of consolidating the company's market position in Spain, whilst driving its international expansion," said Pablo Utrera, an Assistant Director in Advent's office in Madrid. "We left the company in an ideal position to continue growing by building upon its international market leadership."

Tinsa is testament to the perseverance of both Advent and our management teams, and proof positive that value can be created in the face of the most testing market conditions.

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