SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC
20549
________________________________________
FORM 8-K
________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: September 17, 1997
(Date of earliest event reported)
INSIGNIA FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19066 13-3591193
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification
Number)
One Insignia Financial Plaza
Post Office Box 1089
Greenville, South Carolina 29602
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (864) 239-1000
______________________________________
<PAGE>
Item 5. Other Events
Item 7. Financial Statement and Exhibits
(c) Exhibits
Exhibit No.
99.1 Press Release dated September 17, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INSIGNIA FINANCIAL GROUP, INC.
By: /s/ John K. Lines
------------------------
John K. Lines
General Counsel
Date: October 7, 1997
FOR IMMEDIATE RELEASE Contact: James A. Aston
September 17, 1997 Chief Financial Officer
Insignia Financial Group, Inc.
(864) 239-1661
INSIGNIA ANNOUNCES INTERNATIONAL EXPANSION WITH ITS
FIRST EUROPEAN ACQUISITION
Greenville, South Carolina -- Insignia Financial Group, Inc. (NYSE:IFS)
announced today that it had officially launched its international expansion
effort with the acquisition of 60% of the stock of CAGISA (Compagnia di
Amministrazione e Gestioni Immobiliare S.p.A.), one of the leading privately
held property management companies in Italy. The net purchase price was
approximately $2.15 million, with IFS committed to contribute an additional
approximately $500,000, and the seller committed to contribute an additional
approximately $300,000 to the working capital of the company. The seller can
receive an additional $500,000 in deferred purchase price one year after closing
based on the performance of the acquired company. The remaining 40% of the stock
will be retained by the seller subject to an option in favor of IFS; the seller
is an Italian company called Sergrup, which is controlled by the GFL Group of
Italy. GFL Group is an Italian holding company controlled by the Radice Fossati
and Dallera families of Italy, and is one of the leading real estate development
companies in Northern Italy. With partners such as the Fiat Group, the GFL Group
has received approval for and is expected to commence development on real estate
development projects totaling approximately $700 million in early 1998.
CAGISA, founded in 1939, currently manages approximately 10,000 units of
multifamily residential housing, primarily in Rome and Milan. The company has
approximately 28 professionals located in two offices (Rome and Milan), and
manages properties under long term contracts for approximately 26 clients
including the public pension fund ( INPDAP), the Italian Social Security
Institute (IGEI), and Banco Ambrosiano Veneto. Commencing immediately, the
company will operate under the name Insignia/CAGISA.
"The size of this acquisition is dwarfed by its strategic import to
Insignia. It is our belief after extensive research that the demand for property
and asset management services in Italy will increase by more than 500% over the
course of the next few years. Already many of the Italian governmental agencies
(such as the municipalities of Rome and Naples, and the Provincial Institute of
Palermo) have issued Requests for Proposals, in the form of public bids, for the
privatization of the management of all of the properties owned by these cities
and agencies. These RFP's alone constitute the management of approximately
75,000 apartments and tens of thousands of retail and office properties. CAGISA
has qualified for, and is, in fact participating as a part of a joint venture
including a number of companies, in the public bidding for these potentially
significant contracts. In addition to this, Italian banks and insurance
companies owning hundreds of millions of dollars, perhaps even billions of
dollars of real estate assets require high quality real estate and asset
management; United States investors too are increasingly looking to deploy
capital in European real estate in general, and Italy in particular, and are
aggressively seeking both opportunity and partners with the ability to manage
their overseas real estate investments. It is Insignia's objective to become a
dominant purveyor of such services throughout Italy and Europe," said Andrew L.
Farkas, Chairman, Chief Executive Officer and President of Insignia. "We believe
that our strong U.S. base of operations and our extensive institutional
relationships will position us well to assist U.S. companies looking to invest
in European real estate."
He continued, "GFL Group's willingness to sell 60% of its property
management company to Insignia is driven by their recognition of the increasing
level of demand for quality property and asset management services throughout
Italy, and their confidence in Insignia's ability to deliver the requisite
capabilities and technology to CAGISA. The property and asset management
industries in Europe are now beginning to develop. The market demand for quality
services focused on asset value and performance maximization is just emerging in
earnest in many of these countries including Italy. We believe that establishing
a beach head early on, and transferring our know-how, technology and expertise
to an organization that is already established, well known, and well connected,
can provide us with a material competitive advantage as these markets heat up.
Already we have commenced making substantial presentations for new opportunities
and participating in public tenders for governmental business throughout Italy.
We have positioned a new CEO in the company (Roberto Naldi) who will report to
Insignia's new Managing Director of International Operations, Mauro
Keller-Sarmiento; both of these individuals are currently stationed in Rome. We
fervently believe that this will be just the beginning of material, internally
generated growth opportunities for Insignia overseas, and is a signal that we
have officially commenced our international expansion efforts. There is no
question that, over the coming months and years, we will look to continue to
expand these efforts both in Italy and in other countries throughout the UK and
Europe."
Mr. Keller-Sarmiento, Insignia's Managing Director of International
Operations, is 37 years old. He commenced working with Insignia several months
ago. He received his B.A. from Harvard College in 1982 and his M.B.A from
Columbia University in 1988. He has lived all over Europe, South America, and
the United States throughout his life, and has worked previously as a management
consultant at McKinsey & Co. for approximately four years, and as an investment
banker at Morgan Guaranty also for four years. Prior to joining Insignia, he was
a Vice President responsible the selection and operation of a network of retail
distribution outlets for YPF, the large Argentine oil and gas company, stationed
in Buenos Aires, Argentina. Mr. Keller-Sarmiento is fluent in English, Spanish,
Italian, French, and Portuguese.
"Mauro is the ideal individual to lead Insignia through its European
expansion stage. He understands and is comfortable with many of the cultures in
Europe and South America, and is fluent in the languages. I have known him very
well for 19 years since we attended Harvard together beginning in 1978. Having
someone on the ground in these countries, who you can trust, with the business
acumen, background, leadership, and international skills that Mauro has, is an
imperative component of any successful implementation of an international
strategy," added Farkas.
With corporate headquarters in Greenville, South Carolina, Insignia
Financial Group, Inc. is a fully-integrated real estate services company.
Insignia is the largest manager of multifamily residential properties in the
United States and is also among the largest managers of commercial properties.
Insignia commenced operations in December 1990 and has since grown to provide
property and/or asset management services for approximately 2,600 properties
which include approximately 285,000 residential units (including cooperative and
condominium units), and approximately 150 million square feet of commercial
space located in over 500 cities and 48 states.
Certain items in this press release may constitute forward-looking
statements within the meaning of the Private Litigation Reform Act of 1995 (the
"Reform Act") and as such may involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Such
forward-looking statements speak only as of the date of this press release. The
Company expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.
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