FirstService Sells Field Asset Services to Assurant
- Oct 02, 2013
Assurant, Inc. has acquired 100 percent of the equity of FirstService Corp.’s Field Asset Services business for $55 million in cash.
FirstService will use the proceeds from the sale, along with its existing financial resources of approximately $145 million more, to increase its real estate business by investing in Colliers International, FirstService Residential and FirstService brands.
“This results in proceeds that we will redeploy to grow our commercial real estate and residential property management businesses, as well as creating franchising businesses with excellent growth opportunities,” John Friedrichsen, FirstService’s senior vice president & chief financial officer, told Commercial Property Executive. “We have been active acquirers in both segments of our business in the last two-plus years and we see an opportunity in building the businesses through smaller acquisitions with relatively good returns.”
FirstService originally acquired FAS in 2007, following a strategy of making long-term investments in companies it wanted to own.
According to Friedrichsen, as the market softened and changes came about in the U.S. mortgage industry, FirstService believed it was no longer the best owner for the business. Furthermore, FAS provided the firepower needed for the company to strategically invest not only in its own operations, but also to make a significant, strategic investment in Colliers International at the perfect time in the economic cycle.
“We certainly acquired FAS in 2007 without any intention of really ever selling the business and there was no designed exit strategy,” Friedrichsen said. “Since Assurant had a broader strategy around growing services in the residential mortgage market, we decided to sell.”
“This acquisition leverages Assurant’s resources and relationships with lending institutions, and builds on Field Asset Services’ strong operating platform and vendor network,” Gene Mergelmeyer, Assurant Specialty Property’s president &CEO, said in a company statement. “Together, as leaders in the property preservation industry, we will play an increasing role in maintaining healthy, stable neighborhoods in communities nationwide.”
FirstService manages more than 2.3 billion square feet of residential and commercial properties through its three industry-leading service platforms and generates more than $2.3 billion in annual revenues.