Los Angeles, CA – Corridor Capital, through its affiliated funds (collectively, “Corridor”), has successfully sold portfolio company Nationwide Property & Appraisal Services (“Nationwide” or the “Company”), a leading technology-enabled real estate appraisal management company (“AMC”), to Arcapita Group Holdings, an alternative asset manager with a total transaction value in excess of $31 billion. With a belief in the future of Nationwide, Corridor and its institutional coinvestors, 747 Capital and Southfield Mezzanine, elected to rollover a minority interest into the transaction.
Corridor acquired control of Nationwide in late 2016 and the sale marks the next milestone in its journey, fulfilling the aspirations of Nationwide founders Andy Lazev and Ryan Hernberg. Andy and Ryan had shared with Corridor their dream of working with an engaged operationally-oriented private equity firm to build their $35 million annual revenue business to over $100 million.
Corridor applied its transformational partnership methodology, helping Nationwide ultimately achieve more than $140 million in annual revenue and increase pro forma adjusted EBITDA by approximately 5x over the holding period. Corridor teamed with the Nationwide founders to build sustainable scalable infrastructure and pursue both organic and acquisition-based growth.
“It has been an honor to work with the Nationwide founders and leadership team to help evolve an already highly competitive business into one of the stand-out leaders in the US AMC market,” noted Corridor CEO Craig Enenstein. “Corridor’s purpose as a firm is to team with the management of small leadership companies to help them achieve their full potential.”
Phase 1 – Infrastructure Implementation
Collaborating with Andy and Ryan, Corridor focused on enhancing human capital, processes and systems.
Human Capital: During the investment, Corridor assisted Andy’s and Ryan’s transitions and hired successor CEO Sri Velamati, a professional real estate and services executive with experience building large successful enterprises. Corridor established the construct for and recruited Nationwide’s first-ever executive leadership team with a Chief Operating Officer, Chief Revenue Officer, Chief Financial Officer and Chief Valuations Officer and other key functional leaders. Corridor partnered with the Company’s senior management to iterate on overall organizational design as well as key employee incentive programs.
Processes: Corridor and the new CFO designed and implemented a modern finance function including budgeting, dashboard, reporting and controls functions and migrated the Company to a traditional board meeting cadence, lender management capabilities, and annual audits. Collaborating with the new CRO, Corridor identified and implemented a new approach to selling in the AMC sector by inducting Outside Account Managers (“OAMs”) to augment the sales team, yielding a material improvement in client-level market share capture. In core operations, the CEO, COO and Corridor worked together to perform client and product margin analysis and developed strategies to ensure competitive and appropriate pricing.
Systems: Corridor worked with management to ensure a fully tech-enabled platform with automated order intake and order assignment processes that increased accuracy, reduced turn time and optimized organizational performance. The sales function implemented CRM to support growth at scale. Furthermore, Corridor pursued the normalization of systems procedures across the Company to permit easier integration of add-on acquisitions.
Phase 2 – Organic and Acquisition-Based Growth
Organic Growth: The CRO implemented a coordinated, focused new business development program yielding regional and national new client wins including leading lenders, Rocket Mortgage and United Wholesale Mortgage. The Company achieved significant incremental existing account penetration as a result of the OAM program and the build out of revised sales incentive plans.
Acquisition-Based Growth: Corridor facilitated a strategic assessment of the AMC market, with particular focus on geographic and product expansion opportunities, resulting in a prioritized acquisition plan. On behalf of Nationwide, Corridor completed five add-on acquisitions resulting in increased geographic strength in numerous regions, new client pick-up that deconcentrated revenue, valuable human additions, and technology opportunities. The Corridor Operations team facilitated integration of the acquired businesses yielding talent and customer retention.
Corridor believes that implementing its two-phase model transformed this founder-driven company into a mainstream enterprise well-positioned for sustainable long-term growth.
Baird performed investment banking services and Morgan Lewis & Bockius provided legal services for the transaction. Duff & Phelps and RSM supported the process with accounting services. Lockton Companies provided risk and insurance services.