Neinor Homes (A): The Creation of a Home Builder Leader in Spain

The case concerns the first IPO of a real estate developer in Spain, which took place in March 2017, after more than ten years without having produced any, and which, in turn, would be the largest in Europe. The residential development industry in Spain was recovering, and Neinor Homes, which aimed to set a new standard with a modern business model, a highly professional managerial team, and a strong investment in land, seemed to be poised to lead the budding recovery.
The IPO was a real challenge. The good macroeconomic conditions enjoyed by Spain and growing consumer confidence were very recent, and the company, within itsnew model, had been operating for less than two years and had not yet delivered any housing. In addition, it was believed that the property development sector did not adapt well to the market environment.
This case discusses the suitability of the IPO, the suitability of the model proposed by Neinor, the possibility of successfully becoming the new industry standard, resistance to cycle change by both the model and the company, the proposed valuation, and, in turn, the role played by international private equity funds.