Arcapita Group Holdings, a global alternative investment firm, recently acquired a “significant controlling interest” in Nationwide Property and Appraisal Services LLC. Corridor Capital will partner with Arcapita and Nationwide, retaining an ownership stake in Nationwide.
Nationwide Property and Appraisal Services has a network 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. Having completed and integrated five add-on acquisitions over the past few years, the company 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.
“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,” said Atif A. Abdulmalik, Arcapita's CEO. “Close to 50% of Nationwide's customers have maintained their relationship with the company for over six years, highlighting the longevity of its customer relationships, and the company benefits from a free cash flow conversion rate of over 99%.”
Arcapita's management team has completed over $15 billion in US private equity investments over the past 24 years, according to a press release. The firm's 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.
“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,” said Neil Carter, managing director and Arcapita's head of US Private Equity. “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. 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.”
