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Gerantis: buy & build by the book

  • Acquisitions
  • Growth
gerantis-pmv

A 'buy & build' strategy is an excellent business model for companies that benefit from additional scale.

The acquisition of trustee agency Jalo Beheer by Castelmore Group was the starting shot for two additional acquisitions for the Antwerp-based investment company. It thus aims to continue growing in a consolidating and increasingly professional syndicate sector. A ‘buy & build’ strategy by the book.

Jalo Beheer, started in 2003 by Hedwig Van Doninck, has been active as a trustee for many years. With more than 400 properties under management and 17 employees, it is a large office, the only one in our country with ISO 9001:2015 certification by the way. That is not its only asset: it has also had a customised software package developed for trustee services and related activities on behalf of owners’ associations (the legal entity representing the common interests of mainly flat owners). When Hedwig Van Doninck wanted to focus more on the traditional real estate business, he looked for and found the right buyer: Antwerp-based independent investment company Castelmore Group saw the growth potential of the stable larger market player. The group, founded in 2013, takes majority stakes in companies with a recurring revenue model or undervalued growth potential.

No successor

Following the acquisition of Jalo Beheer, Castelmore Group – through the established NV Gerantis in which it has a 100% stake – had its eye on another player in the sector. Beheer nv, a well-known Antwerp syndicate office, was also acquired. There was no successor in the Vlayen family, which ran the business, and because of the increasingly complex regulations for syndicates and co-owners, it also saw an opportunity to incorporate its activities in the Gerantis syndic platform. Indeed, Jalo Beheer’s software package gives it a competitive advantage in a labour-intensive market thanks to significant efficiency gains. The acquisition of the syndicate office brings Gerantis’ portfolio to over 700 buildings and some 22,000 lots.

Own insurance agency

The acquisitions prove that Gerantis has a good nose for the evolution in the sector: after all, the increasing legal and administrative requirements and the related liability keep raising the bar for many smaller players, leading to consolidation and professionalisation. The acquisition of insurance broker VSVB also demonstrates strategic insight: all major players have their own insurance brokerage offices, allowing the insurance portfolio of the managed buildings to be housed in their own group, resulting in higher margins and a more extensive offer and higher service level for customers. The ‘buy & build’ strategy used by Gerantis (growing a company rapidly through acquisitions) is a great business model for companies that, like Gerantis, benefit from additional scale. In this case, Gerantis’ unique software package, cost-efficient structure and strong building managers form the basis of that scalable business model. Of course, such an approach requires funds to make acquisitions. Gerantis found those with PMV: to finance the acquisitions, Gerantis called on a subordinated loan from the Flemish investment company.

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www.gerantis.be