AMC Mergers and Acquisition – Someone has a positive view of residential lender appraising!
Nationwide Property & Appraisal Services purchased by investment firm Arcapita Group Holdings
Excerpts: The deal gives Arcapita an AMC that serves mortgage lenders in all 50 states, has a network of over 15,000 licensed appraisers, and grossed $144 million in revenue in 2021.
“We were attracted by Nationwide’s highly cash generative business, experienced management team, and strong base of clients across the country,” Arcapita CEO Atif Abdulmalik said in a statement. “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%.”
The AMC has acquired five other companies since Corridor bought a stake in Nationwide in 2016. In June, Nationwide acquired Portland, Oregon-based First Choice Appraisal Management, expanding its reach into the Pacific Northwest.
Other large financial firms are also putting money into the appraisal management space, which is highly fractured.
In October, private holding group StoicLane acquired control of the appraisal management company Lender’s Valuation Services (LVS).
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Class Valuation purchases Metro-West
Excerpt: In a press statement, Class Valuation said Metro-West, founded in 1987, is the largest independent residential appraisal firm in the country, with staff appraisers in over 80 U.S. metros.
Class Valuation, which itself is owned by private equity firm Gridiron Capital, said the acquisition of Metro-West would fit into its larger strategy of fusing tech tools such as automation and 3D measurements to help clear the well-documented capacity issues in appraisal.
“One area of focus for us has been the growth of a staff appraiser network and building out a nation-wide trainee program,” John Fraas, CEO of Class Valuation, said in a statement.
This is the fifth acquisition Class Valuation has made in the last 12 months, and the seventh in recent years. In September, Class Valuation acquired Kansas City, Missouri-based Pendo Management for an undisclosed sum.
There’s been a surge in private equity investment in the U.S. appraisal space over the last two years.
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My comments: The investors see money to be made in appraisals. What will they think when it inevitably crashes again, like it always does. I wish I had an AMC I could sell to investors ;>
If you work for any of these AMCs, keep close track of your billings, so they don’t get lost in any accounting mergers. No one knows, of course, if their appraisal management will change.
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Appraisal Obsolete? Now or in the Future?
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Excerpts: A student contacted me with the following dilemma concerning an Appraisal Management Company (AMC) request: “I told the Management Company that I cannot mark the Zoning Compliance as ‘Legal’ if the report is marked “as-is,” because this would not be true for the current “as-is” condition of the subject on the effective date of the appraisal. The AMC insists that as long as I disclose in the addendum that the zoning is currently ‘illegal,’ then I can mark on the first page as ‘Legal.’”
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