Equity International exits Mexican homebuilder Homex

The Chicago-based private equity firm founded by Sam Zell and Gary Garrabrant sells remaining shares in Mexico’s largest homebuilder, four years after helping the company list in New York, Mexico.

Chicago-based private equity real estate firm, Equity International, has sold its remaining stake in Mexico’s largest homebuilder, Homex, six years after first investing in the company.

Homex today revealed EI, founded by Sam Zell and Gary Garrabrant in 1999, had liquidated 11 million shares in the Mexican firm after gradually reducing its ownership position. In February, EI sold 5.1 percent of Homex to the firm’s founding family. No financial details of the liquidation were released.

EI was one of the main investors in Homex in 2002, helping the company list on the New York and Mexican Stock Exchanges two years later. According to EI’s website, the firm played a direct role in Homex’s “transformation from a family-owned homebuilder into one of the leading companies in Mexico.”

The 2004 IPO priced Homex at $15.80 per American Depositary Share, as traded on the NYSE. Each ADS represents six common shares. Homex’s share price on the NYSE at 3pm today was $62.17.

In a statement, Homex – which builds affordable and middle-income housing in 30 Mexican cities – said Garrabrant had resigned from the homebuilder’s board of directors, effective immediately, as a result of the liquidation.

“The last five years have been a period of tremendous growth for Homex, and we were fortunate to benefit from Equity International’s extensive experience in capital markets and its proven success in international real estate investments,” said Gerardo de Nicolás, Homex chief executive officer, in a statement. “They have been an ideal partner.”

Garrabrant said the partnership had been “tremendously successful” insisting EI would continue to invest in the Mexican homebuilding industry. “We believe in the strength of the Mexican homebuilding industry and are confident Homex will continue to thrive in this market. We know we will continue to share a long and prosperous relationship with Homex.”

Earlier this month, Zell said he saw no significant opportunities in the established real estate markets of the US and western Europe, preferring instead to focus on areas such as Mexico and Latin America.

In a question and answer session at a National Association of Real Estate Investment Trusts (NAREIT) forum in London, Zell said he would continue to look at property in Latin America, as well as look to China for opportunities. “There is a growing middle-class scenario across the world, particularly in emerging markets. I’ve tried to focus investment on arenas that play to that,” he said.