Diagonal Gest

Background, Sourcing, Business

JZ International (“JZI”) invested in Diagonal Gest (“DG”) in July 2007. The transaction was sourced internally by JZI, through a prior investment in a similar company which JZI subsequently merged into DG in 2008.

DG specializes in providing mortgage processing services to many of Spain’s leading banks, including Santander, Sabadell, BBVA, La Caixa, Pastor, Popular and Bankia. Mortgage processing entails the following services: obtaining property deeds, validation of valuations, coordinating mortgage documentation and signing, making payments for professionals/taxes/duties, registering charges, liaising with notaries and authorizing the transfer of funds, among others. Mortgage processing may also encompass providing certain repossession services on behalf of banks.

Growth Opportunity

  • The mortgage processing services industry was consolidating and there were significant opportunities to expand DG’s market share via a buy-and-build strategy
  • JZI was able to merge its existing asset in the sector into DG and extract significant synergies
  • Strong, proven, highly-motivated entrepreneur/CEO and team

JZI Value-Add

  • Led the buy-and-build strategy in Spain, identifying many of the opportunities and closing the acquisitions
  • Initiated, sourced and negotiated the company’s expansion into Latin America, via an investment in Chile, with subsequent add-on acquisitions in Peru, Colombia and Mexico
  • Alongside management, helped DG develop new lines of service to complement the core business (i.e., legal and insolvency)
  • Introduced significant banking customers to the business
  • At the request of DG founder/CEO, helped build-out the senior management team
  • In spite of making its investment in DG just prior to the financial crisis (in July 2007), JZI helped DG increase EBITDA from €2.0m to more than €7.0m from 2006 to 2014
  • Led the sale process of DG to a French industrial group