Arcapita Group Holdings (“Arcapita”), the global alternative investment firm, recently announced completing the acquisition of Nationwide Property and Appraisal Services, LLC (“Nationwide”), a second-largest independent appraisal management company in the United States.
The firm serves out the mortgage lending institutions across all 50 states from funds associated with Corridor Capital, LLC (“Corridor”), a leading lower middle-market private equity firm.
Additionally, according to Arcapita, the Corridor will partner with the firm and Nationwide, holding an ownership stake Nationwide.
As per the firm’s reports, Arcapita’s management team has completed over $15 billion in US private equity investments over the past 24 years. According to the firm’s sources, its US private equity investment strategy has predominantly focused on acquiring asset-light business services and logistics companies which benefit from the trend for large organizations to outsource their non-core activities, such as facilities management, to reduce costs and achieve operational efficiencies.
Atif A. Abdulmalik, Arcapita’s Chief Executive Officer, stated: “We are extremely pleased to have completed the acquisition of Nationwide. This investment is a good fit for our US private equity investment strategy which is focused on acquiring asset-light business services and logistics companies, and also allows us to bring to bear our deep expertise in global real estate.”
Mr. Abdulmalik, further added: “We were attracted by Nationwide’s highly cash generative business, experienced management team, and a strong base of clients across the country. Close to 50% of Nationwide’s customers have maintained their relationship with the company for over 6 years, highlighting the longevity of its customer relationships, and the company benefits from a free cash flow conversion rate of over 99%.”
Neil Carter, Managing Director and Arcapita’s Head of US Private Equity stated: “Residential real estate is the US’s largest asset class, with sound fundamentals driven by population growth in the primary homebuying demographics, and increasing levels of new home construction. With appraisals being a regulatory requirement for mortgages for new home purchases, refinancing, and foreclosures, the $7.5 billion real estate appraisal services market has cumulatively grown by 32% since 2008.”
Neil also added: “Nationwide is a leader in this sector and is well-positioned to accelerate organic growth, drive efficiency and achieve margin improvements through its tech-enabled platform, and continue to complete accretive acquisitions.”
Sri Velamati, CEO Nationwide stated: “Nationwide is extremely pleased to be partnering with Arcapita, a leading alternative asset manager partner, that shares a mutual vision for the future and will support Nationwide in continuing to build on its core strengths of customer service, purposeful acquisitions, and technology investment.”
According to Arcapita sources, Nationwide is a market leader having a robust network base of over 15,000 licensed appraisers, with its clients including more than 100 blue-chip lenders and 21 of the top 25 wholesale lenders in the US.
The firm had unique industry-leading appraisal turnaround times and accuracy rates. Having accomplished and integrated five add-on acquisitions over the past few years, the firm has grown revenues at a CAGR of 14.3% over the past four years, and Nationwide management estimates revenue and an adjusted EBITDA of $144 million and $15 million, respectively, in 2021.
