MacDonald Dettwiler and Associates agreed to a deal to sell its property information business to San Francisco-based private equity investment group TPG for $850 million.
TPG will acquire MDA Lending Solutions, which includes MDA DataQuick and MDA Mindbox—as well as MDA's insurance information and valuation provider, Marshall & Swift/Boeckh—in a deal expected to close in late 2010 or early 2011.
MDA's core business is aerospace technology, including robotics and satellite equipment. It began pursuing real estate information acquisitions in 2000 when it purchased DataQuick and later added MSB in 2004 and Mindbox in 2006. The impetus of the sale to TPG was to return MDA to its core competency in the aerospace technology field, Rich Kuegler, MDA Lending Solutions vice president of business development told this publication Friday.
"From TPG's perspective, the overall property information business has developed into a very profitable framework," Kuegler said. "The business is stable in terms of the market that we serve and our customer base, and that made it an attractive target for TPG, which typically invests and looks to return on that investment over a certain amount of time."
MSB develops and provides residential and commercial property valuation technology to the North American property and casualty insurance industry. Its data is used to determine property insurance coverage amounts, identify inaccurate insurance coverage, estimate, manage, and analyze claims.
DataQuick provides technology and data related to property history and characteristics, sales and loan information and market valuation derived from county assessor and recorder data. MindBox provides decisioning technology for mortgage pricing, product selection, approval and underwriting.
The MDA Lending Solutions name will change and TPG will drop the MDA brand, but Kuegler said the timeline or strategy for rebranding has not been set. He did say it's unlikely the new name will include the TPG brand.
"To the extent that I can see, TPG usually stays in the background and doesn't really promote their brand out as a leading part of its member companies," he said.
The MDA Lending Solutions leadership will also remain in place after the deal closes and Kuegler expects no initial negative impacts from the acquisition.
"In the short term, we don't see any adverse impact or system changes or any technology changes that we would be incurring as a result of the transaction," he said. "But we do see long term benefits because of TPG's reputation, experience and commitment to invest in our future growth as a business."
"One of the attractive parts of the acquisition is the strong leadership team that we have in place and the longevity of that leadership team," Kuegler said.
TPG, formerly known as Texas Pacific Group, holds $47 billion in assets under management. Its previous and current holdings include a variety of technology, real estate and insurance companies, including Fidelity National Information Services, Alltel Wireless, multiple semiconductor companies, computer manufacturing giant Lenovo and travel website Hotwire and Sabre Holdings, parent of Travelocity.
In addition, TPG has formed real estate joint ventures with Caruso Capital Partners in the U.S. and Green Property in the UK and Ireland. Other real estate intensive businesses TPG has held stakes in include Harrah's, Neiman Marcus and PETCO.
A TPG spokesperson declined to comment because the deal is still pending.
