Ex-HIP provider MDA is sold to private equity firm

he Canadian firm and former HIP provider MDA is selling its property information products division, including personal search business SearchFlow.

The buyer is a private equity firm, TPG Capital, which is purchasing the property-related businesses in both the UK and America for $850m.

In the UK, the effect could be to pump money into growing the MDA business, although it sold off 11 long-term contracts only last month.

Just days before the deal was announced late on Friday, a senior executive told EAT of plans to expand, using “deep pockets”. He spoke of building on relationships with 3,500 law firms and 10,000 surveyors, and new initiatives in e-conveyancing. However, he gave no clue as to any impending sale.  

The Canadian firm’s background, curiously, is in space technology, and MDA is not selling its space hardware division.

MDA’s CEO, Dan Friedmann, said: “Our property information business was built on the strengths of our information solutions competencies.

“We determined that this business should operate under separate ownership going forward if we could crystallise good value. This transaction provides an excellent return on the investments we have made in the property information business over the past decade.”

MDA came to the UK to pursue a new line of business when HIPs were announced, and arrived with the acquisition of SearchFlow.

It later went on to buy HIP provider Richards Gray in March 2008 for £10.845m.

However, the purchase was badly timed, with the housing market in freefall, and the firm was effectively closed just months later, although the brand was subsequently revived.

HIPs failed to be a money-spinner for any of the providers, as the market dived. The UK business of MDA went on to take a massive financial hit when HIPs were abolished.

While HIPs created a huge rise in the use of personal searches, the market for these has now fallen back by as much as 80%. The hub business at MDA has helped offset this decline, as it deals in official searches by providing back-office technology for local authorities.

However, last month MDA sold off 11 long-term contracts for £2.9m, saying they were no longer ‘strategic’ to the property information business.

The deal with TPG includes all of MDA’s information products business units worldwide. In the UK and Ireland, these include three search businesses, MDA SearchFlow, Rochford Brady Group, and Millar & Bryce, plus MDA Hub and xit2, which takes work from lenders and gives it out to valuers.

The transaction is expected to complete early next year.

Stuart Pearce, group managing director for MDA information Products, said: “TPG is a world-class investment company with deep skill sets and experience that will help us achieve our ambitious plans for growth over the next few years.”

Bryan Taylor, a partner at TPG Capital, said: “We are very excited about investing in these high-quality property information assets. MDA and the respective management teams have done an excellent job growing these companies.

“This investment fits very well within our broader data services portfolio, and we look forward to working with management in the US, Europe and Canada to continue growing these businesses.”