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, date 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.
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.
Hannon said the transaction 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.”
About Altus Group
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.