Oct 26 2009
Southern Cross Group, Evercore Mexico Capital Partners (jointly the "Funds") and Servicios Corporativos Javer, S.A.P.I de C.V. ("Javer" or the "Company") announced today that they have signed an agreement by means of which the Funds acquire a controlling interest in the Company.
This transaction allows Javer, leader in the Mexican homebuilding sector, to incorporate strategic partners with proven financial and operating experience throughout the region. Javer, which plans to build more than 17,500 homes in 2009 and has land reserves in excess of 100,000 units, is one of the fastest growing developers of homes in the low, middle and residential segments in Mexico.
"The operating experience, strategic thinking and regional view of our new shareholders will contribute towards further consolidating Javer's growth as we work towards becoming one of the country's leading homebuilders and consider accessing the public equity markets," stated Salomon Marcuschamer, founder of Javer.
This transaction does not involve any changes in the Company's management, operating team or strategy. Roberto Russildi and Eugenio Garza, CEO and CFO respectively, will continue heading the Company's operations as they, and the rest of the senior management team, have agreed to sign long-term employment contracts with incentives tied to the performance of the Company.
Salomon Marcuschamer, who will serve as Javer's Honorary Chairman, will remain actively involved in the management of the Company particularly with respect to land acquisition and development. The Board of Directors will also include Ricardo Rodriguez, Cesar Perez Barnes and Sebastian Villa from Southern Cross Group, Pedro Aspe and Alfredo Castellanos from Evercore, Fernando Alvarez Neila, Joe Ackerman and independent board members to be appointed shortly after the closing. Ricardo Rodriguez will act as Chairman of the Board.
The new partners have a long-standing track record of achieving extraordinary investment returns by focusing on improving the operations of their portfolio companies while operating within very conservative leverage structures. The Funds do not intend to implement any fundamental changes in Javer's overall business or financial strategy, especially with respect to leverage and dividend policies as the intention is to re-invest free cash flow to maximize growth. The transaction does not involve any modification of the cash balance or financial position at Javer.
Cesar Perez Barnes, Managing Director of Southern Cross, stated, "The incorporation of an investor group with long-standing, proven experience in the region will contribute significantly to consolidate the institutionalization of management and corporate governance procedures. We believe our capabilities perfectly complement Javer's vision and that, together, we will continue maximizing the Company's value within a general context of growth in the Mexican homebuilding sector."
Homebuilding in Mexico is approximately a US$ 20 billion industry with annual demand for homes in excess of 800,000 units with over 720,000 mortgages granted each year.
"Our investment in Javer relies on solid fundamentals, in one of the most relevant sectors of the country's economic activity. The market knowledge and business expertise of Javer's executive management have allowed it to become a leader in the sector and is a testament of the company's competitive position," declared Pedro Aspe, Co-Chairman of Evercore.
Roberto Russildi, Javer's CEO commented on the transaction, "At Javer we are honored by the fact that such well recognized investment firms chose to join us in what we foresee to be an unparalleled market opportunity. It is a true vote of confidence to what the company and our team have achieved to date. Their participation, together with that of Mr. Marcuschamer, provides a tremendous sponsorship umbrella that will guide us as we execute our business strategy which includes titling in excess of 45,000 homes over the next couple of years."
The closing of this transaction, which is expected in November of this year, will require approval from Mexican regulatory authorities.
Source: http://www.southerncrossgroup.com/