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Altus to sell property tax service to Ryan, LLC for $700M

Proceeds to fund debt reduction, share buyback program, future growth, and payout to shareholders

Altus Group logo.UPDATED WITH INFO, NEW QUOTES: Altus Group (AIF-T) has a definitive agreement to sell its global property tax business to international tax services and software provider Ryan, LLC for approximately $700 million as the firm continues to transform to a pure-play commercial real estate software, data and analytics platform.

The companies also entered an agreement for Ryan to subscribe to Altus Market Insights for an initial three-year term for a total of $15 million ($5 million annually).

“The sale of our property tax business is a major step forward in our journey to become a pure-play CRE, software, data and analytics platform. It’s a momentous transaction for the company, our shareholders, our clients and our employees,” Altus Group CEO Jim Hannon said during a morning call with analysts to discuss the pending sale.

“This transaction will accelerate our portfolio transformation and allow us to focus our resources on our core analytics business. This is particularly important at a time when demand for actionable data driven intelligence is increasing as TRE (transfer of real estate) market activity is returning to more normal levels.”

“It is additionally giving us firepower to invest organically and via acquisitions. This divestiture will also allow us to return a meaningful amount of capital to our shareholders, while strengthening our balance sheet.”

Proceeds to reduce debt, fund growth, payout

Altus intends to utilize the proceeds for a variety of purposes, including paying down bank debt (which was $328.6 million at the end of Q1), a payout to shareholders and potential future acquisitions or growth investments. It will also scale up its share buyback program, more than tripling its value from approximately $72 million to $250 million.

Hannon also said this will lead to a restructuring of its executive operations, though no details were immediately provided.

The transaction is expected to close in the first half of 2025, subject to a variety of regulatory approvals and closing conditions. Altus states in the announcement that the transaction is not subject to any financing conditions as it is an all-cash deal.

In relation to Altus Group’s finances, he painted a rosy picture looking ahead to the future.

For the full-year of 2026, post closing, he forecast “high single-digit consolidated revenue growth with expanding margins and higher cash-flow conversion. 

“Underpinning that our analytics business will have double-digit revenue growth with adjusted EBITDA margin at approximately 35 per cent,” Hannon said. “This is truly an exciting moment in Altus’s history and a meaningful value creation moment for our shareholders.”

Financial details of the transaction

The $700-million price tag represents a 10.1 times 2023 adjusted EBITDA multiple for the business segment, and over 16 times 2023 free cash flow (over 14x net proceeds), the announcement states.

After taxes, fees and restructuring expenses, net proceeds are estimated to be approximately $600 million.

Evercore is serving as financial advisor to Altus Group and provided a fairness opinion to Altus Group’s board of directors. Stikeman Elliott LLP and Cravath, Swaine & Moore LLP are serving as legal counsel to Altus Group.

“Altus Group has built an impressive property tax business that is highly regarded as a trusted advisor in the industry,” G. Brint Ryan, chairman and chief executive officer of Ryan, said in the announcement. 

“We believe we are the perfect home for its many talented employees and loyal customers who will benefit from our combined platform to effectively manage their property tax liabilities. This acquisition, along with the commercial subscription for Altus Group’s Market Insights offer, significantly bolsters our growing property tax practice.”

Timing of the Altus Group decision to sell

Hannon said the transaction is a result of senior management's ongoing reviews of all segments of the company's business. Responding to a question about the timing of the transaction, he suggested potential suitors take a longer-term approach than just current market conditions.

"The cycles in tax are short and the potential strategic buyers of the business understand those cycles, so ... if the Ontario cycle was back, and we don't know when it's coming back, or the U.K. cycle was at peak, which they just went through an election, as you look at those two things, the potential buyers out there, they understand the duration of those cycles," Hannon said.  "If you are at a peak in that, the cyclicality of this business a trough is probably coming. they know that, and you normalize.

"This business, I think, is absolutely appropriately valued."

While the transaction will turn Ryan, LLC into a much more significant market player in the property tax sector, Hannon said he doesn't foresee serious issues getting regulatory approval to close the transaction.

"There's a robust environment out there and there are many players in the tax business who are significantly larger than what this entity will look like," Hannon said.

About Altus Group and Ryan, LLC

Altus Group, which is based in Toronto, is a provider of asset and fund intelligence for commercial real estate via a platform of technology, advanced analytics and advisory services. 

Its services help commercial real estate investors, developers, proprietors, lenders and advisors manage risks and improve performance returns throughout the asset and fund lifecycle. 

Altus Group is a global company with approximately 3,000 employees across North America, EMEA and Asia Pacific.

Ryan has its global headquarters in Dallas, and provides a suite of federal, state, local and international tax services on a multijurisdictional basis.

Ryan has a team of more than 4,800 professionals and associates serves over 30,000 clients in more than 80 countries, including many Global 5000 companies.

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