Altus to buy Argus Software for $130 million

(Reuters) – Real estate consulting firm Altus Group (AIF.TO: Quote, Profile, Research) said it will acquire Argus Software for $130 million, to offer commercial real estate data and analytics to its clients, and it expects to cut its quarterly dividend by half.

The deal comes at a time when North American real estate merger and acquisition activity has rebounded strongly and 2011 is expected to see more deals in the space than last year.

Shares of Altus fell more than 13 percent to C$9.28, their lowest in more than one-and-a-half year, on Tuesday on the Toronto Stock Exchange.

Argus Software, previously known as Realm Solutions Inc, makes software for analysis and management of commercial real estate investments.

The deal is expected to immediately add to Altus’ adjusted earnings and cash flow as the acquisition will bring it 4,600 clients in 45 countries.

The transaction will be funded by paying $80 million in cash and by issuing $50 million of debt to some Realm shareholders.

Altus is being advised by BMO Capital Markets for the deal, which is expected to close in the second quarter.

Altus Group, formed by merging three real estate consulting companies in 2005, has operations in 14 countries, including Canada, UK, Australia, the United States and the Middle East.

It will also undertake a review of the on-going strategic fit of its various business lines and may elect to divest selected non-strategic operations, Altus said in a statement.

The company expects its quarterly dividend to be reduced to 15 Canadian cents a share from 30 Canadian cents a share.

(Reporting by Aftab Ahmed in Bangalore; Editing by Joyjeet Das)

Altus to buy Argus Software for $130 million