Cinven asks for 415 million loan for record purchase of Idealista

Cinven has sought €415 million in loans from a dozen banks to finance the purchase of property portal Idealista from EQT, the largest acquisition in the history of an online company in Spain, valuing the company.According to several market sources consulted by EXPANSIÓN, its value was 2.9 billion euros.

The British venture fund, led by Spaniard Jorge Quemada, had been in exclusive negotiations on the details of the agreement since early last June and signed the deal on Thursday night, as these media reported exclusively yesterday.

During this time, the firm worked with the main banks operating in Spain to refinance Idealista and develop a new debt structure for the real estate portal. At the request of Idealista’s management, leverage will remain at just three times EBITDA, which is lower than the usual level for private equity, which is 415 million euros.

banking syndicate

Santander and CaixaBank are leading the financing as joint bookrunners, although the banking syndicate also includes BBVA, Société Générale, ING, BNP Paribas, Crédit Agricole, Unicredit, Sabadell, Mizuho, ​​MUFG and Bank of Ireland.

The debt consists of a loan that is periodically amortized (TLA) and a seven-year pooled loan (TLB), the main characteristic of which is that the principal is repaid at maturity and that only interest accrues during this period.

Considering that Idealista’s operating value is €2,900 million (21 times EBITDA), of which €415 million is debt, the real estate portal’s 100% equity value is €2,485 million.

Cinven will have to allocate around 1.740 million euros of capital from its eighth venture fund, endowed with 13.500 million, to obtain the agreed 70% in Idealista, while EQT, which until now had 55%, will reinvest around 447 million through EQT. The management team, for its part, allocates about 298 million to maintain its 12%.

Apax Partners, which owned 17% of Idealista, and Oakley Capital, which owned 12%, gave up their stake in the group as part of the deal.

However, the closure of the facility could still be delayed by several months as it awaits relevant regulatory approvals in Spain, Italy and Portugal, markets where Idealista has a presence.

Competence

At the auction organised by Morgan Stanley, Cinven beat out other funds that were also very interested in acquiring the company. General Atlantic in consortium with CPPIB and TA Associates together with a British manager were the ones who were really ready to pay the almost 3 billion million that EQT and the Idealista management team were asking for.

Cinven, however, was the quickest to execute and finally managed to win the piece after breaking through a competitive process with a binding offer in early June that allowed it to hold exclusive talks on the details of the agreement, these media outlets last reported on June 6.

Cinven advised JPMorgan on financial matters, McKinsey on consulting and Freshfields on legal matters. A&O Shearman was legal counsel to EQT, and Dentons, Garrigues and Clifford Chance were the law firms that supported Idealista, which was also worked with Deloitte.

Strengthens its weight in the real estate sector

The acquisition of Idealista is Cinven’s second major move into the Spanish real estate business. The European venture capital firm completed the purchase of Tinsa, a real estate valuation, analysis and consultancy company, in August 2016. With its complementary business to Idealista, Cinven already has a large European real estate platform.

Cinven launched the sale of Tinsa in 2021, but suspended it when the offers received did not come close to the company’s expected price of 600 million euros. Idealista is currently present in Spain, Italy and Portugal. Tinsa, for its part, has a much more geographically diversified business, being present in 14 countries (Spain, Germany, Austria, Belgium, Costa Rica, Denmark, Spain, Italy, the Netherlands, Portugal, Argentina, Chile, Colombia, Ecuador, Mexico, Peru and Morocco). Tinsa ended 2023 with a turnover of 179.7 million and around 1,500 employees. The company’s turnover has doubled in the last decade, with international markets accounting for 50% of its turnover.