The merger tentatively is slated to close in early October. Theoutcome will create one of, if not the, largest independentvaluation and consulting companies in the world for the real estateindustry. Ben Loughry, a founding stockholder and managing partnerof Integra's Fort Worth and Dallas offices, tells GlobeSt.com thatthe goal is to be a $1-billion company in two to three years.Loughry and Integra's other 10 directors on its executive boardinitially will get two-year terms on Altus' board of trustees.

|

During Altus' conference call yesterday to discuss the merger,CEO Gary Yeoman told analysts that the Integra merger would be muchlike its others in recent years, with the seller taking a stake inthe company to show its commitment. Both boards unanimouslyapproved the merger plan in recent weeks, clearing the deck for anon-binding letter of intent and the airing of as many details aspossible at this stage. Altus' stock shot up 8.96% to $18.25 perunit by the time the Toronto Stock Exchange closed for the day. Theacquisition will be bundled with cash, equity and bankfinancing.

|

Altus and Integra have been doing business together since 1999."We know each other. We work well with each other. We like eachother and we have similar interests," Loughry says. "We are takinga significant interest in their company." Integra has 125shareholders.

|

[IMGCAP(2)]Loughry, as verified by Yeoman during the call, saysIntegra's management team sized up several opportunities to expand.The Altus acquisition catapults Integra into a global positioning,which has been a top priority for awhile as the New York City-basedseller strategically positioned its teamthrough the Royal Institution of Chartered Surveyors. As for thebuyer, it's an opportunity to plant its flag in the US and capturemarket share at the same time, seizing leverage from changes inlending rules and tougher underwriting requirements.

|

Altus and Integra are jockeying to be ahead of the curve as morelenders, institutional investors and the industry move towardvaluations from independents rather than brokerage house-affiliatedappraisers. "There's been recent corporate scrutiny in the USregarding reporting of values," Loughry says. "There's a growingpreference to use firms like Altus and Integra where there's acommitment to delivering independent and unbiased analyses."

|

The firms' largest competitors are brokerage house-affiliatedvaluation groups. "The issue of independence is paramount. Anyonewho has anything to do with the financing or ownership of the realestate can't participate in any valuation because of conflict,"Yeoman told analysts. "The finance community and auditors need toknow that it's just not that the independent valuation is good, butthere has to be a perception of independence and we think we arewell positioned to increase our market share through that. There isno perception at all as far as conflict for us and we think ourcompetitors have some real tall orders to clear that issue."

|

Loughry says the Altus-Integra marriage, with the name still tobe determined, will enable the company to add 200 to 400 people toits ranks. "We expect the staff to grow by 25% in two to threeyears," he says. Integra has 850 employees in 55 US cities and oneoffice in Mexico. Altus has 1,300 employees in Canada, where itmaintains 31 offices in 23 cities and 130 employees in six citiesin the UK. Altus also plans to gain inroads this year intoAustralia and South America and add more European cities to itsitinerary.

|

Altus went public in 2005, growing ever since through companyacquisitions. It's been no secret that Integra has been eyeing allopportunities to expand. "We just know the fit is right," Yeomansaid during the call. "The beauty about this deal is it's a corebusiness."

|

Yeoman didn't disclose even tentative pricing during the call,but did promise to return with some hard numbers after Ebitda'sbeen fully determined and audits are completed, which he estimateswill take a couple months. "This price is going to be accretive forAltus, but it's certainly not going to be like a small mom-and-popthat we've acquired. We're going to give Integra the respect itdeserves. We have nothing but upside. They are a significantbusiness--and they're wildly known by all the financialinstitutions throughout the country."

|

In fact, Yeoman intimidated that if the two companies didn'tmerge now that they were predestined to meet in the future due totheir parallel business lines and growth plans. "It made so muchmore sense to do it now," he said.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.