Loughry

positioned its team

Altus and Integra are jockeying to be ahead of the curve as more lenders, institutional investors and the industry move toward valuations from independents rather than brokerage house-affiliated appraisers. "There's been recent corporate scrutiny in the US regarding reporting of values," Loughry says. "There's a growing preference to use firms like Altus and Integra where there's a commitment to delivering independent and unbiased analyses."

The firms' largest competitors are brokerage house-affiliated valuation groups. "The issue of independence is paramount. Anyone who has anything to do with the financing or ownership of the real estate can't participate in any valuation because of conflict," Yeoman told analysts. "The finance community and auditors need to know that it's just not that the independent valuation is good, but there has to be a perception of independence and we think we are well positioned to increase our market share through that. There is no perception at all as far as conflict for us and we think our competitors have some real tall orders to clear that issue."

Loughry says the Altus-Integra marriage, with the name still to be determined, will enable the company to add 200 to 400 people to its ranks. "We expect the staff to grow by 25% in two to three years," he says. Integra has 850 employees in 55 US cities and one office in Mexico. Altus has 1,300 employees in Canada, where it maintains 31 offices in 23 cities and 130 employees in six cities in the UK. Altus also plans to gain inroads this year into Australia and South America and add more European cities to its itinerary.

Altus went public in 2005, growing ever since through company acquisitions. It's been no secret that Integra has been eyeing all opportunities to expand. "We just know the fit is right," Yeoman said during the call. "The beauty about this deal is it's a core business."

Yeoman didn't disclose even tentative pricing during the call, but did promise to return with some hard numbers after Ebitda's been fully determined and audits are completed, which he estimates will take a couple months. "This price is going to be accretive for Altus, but it's certainly not going to be like a small mom-and-pop that we've acquired. We're going to give Integra the respect it deserves. We have nothing but upside. They are a significant business--and they're wildly known by all the financial institutions throughout the country."

In fact, Yeoman intimidated that if the two companies didn't merge now that they were predestined to meet in the future due to their parallel business lines and growth plans. "It made so much more sense to do it now," he said.

Instant Insights /

Altus, Integra Disclose Merger, Plan $1B Firm

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