International Land Alliance Inc. acquires Rancho Costa Verde Development, LLC for USD 13,500,000 (2023)

Deal facts

Buyer: International Land Alliance Inc.
Target: Rancho Costa Verde Development, LLC
Deal value: USD 13,500,000
Announced: 9 January 2023
Status: Completed
Sector: Real Estate
Country: Mexico
Consideration: cash, shares, loan-note

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Deal timeline

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9 Jan 2023CompletedClosed
International Land Alliance Inc. completes acquisition of Rancho Costa Verde Development, LLC
Item 1.01 Entry into a Material Definitive Agreement. On January 3, 2023, the Company, executed a definitive Securities Purchase Agreement (the “Agreement”) to acquire the remaining 75% of the membership interests of Rancho Costa Verde Development, LLC (the “Membership Interests”) from International Real Estate Development, LLC (“Seller”) for $13.5 million, consisting of a $8.9 million Secured Con
Source

OpinionExit Mode editorial

We see a clear signal in the completed acquisition of Rancho Costa Verde Development, LLC by International Land Alliance Inc. This cross-border transaction, announced on 9 January 2023, moves at a value of 13.5 million USD and highlights the appetite for US capital to secure development assets in Mexico. The deal type is strategic, suggesting the buyer seeks more than just a balance sheet entry. They likely want control over a specific pipeline or geographic footprint that aligns with their long-term growth plan. For the SME founder watching from the UK, this serves as a reminder that geographic distance does not preclude a high-quality exit if the strategic fit is strong enough.

The structure of the consideration is where the real mechanics lie for the seller. The deal mixes cash, shares, and a loan note. This is a classic tripartite structure designed to bridge valuation gaps while managing tax and cash flow. The cash portion provides immediate liquidity, but the inclusion of shares and a loan note means the founders are not entirely cashing out. They retain an economic stake in the future performance of the combined entity. This arrangement often triggers change-of-control covenants or specific escrow requirements to protect the buyer against post-completion liabilities. It also defers a portion of the seller's tax liability, which can be a double-edged sword depending on the jurisdiction of the loan note repayment.

We think this deal illustrates how complex capital structures can facilitate exits in volatile sectors like real estate. The use of a loan note specifically suggests the buyer needed to preserve working capital for the ongoing development work in Mexico. For the founder, this means the headline value is only part of the story. You must scrutinise the terms of the deferred consideration. If the loan note carries a fixed interest rate or a specific maturity date, your exit is only partial. If it is contingent on future project milestones, your ultimate payout remains at risk. The regulatory context here involves US and Mexican investment rules, but the commercial risk sits with the seller's ability to monitor the buyer's execution of the development plan.

You should review your own exit strategy this week to identify if a mixed-consideration offer would suit your liquidity needs better than a pure cash deal. Map out exactly how much of your future wealth is tied to the buyer's performance and whether you have the resources to manage that risk post-sale.

Editorial opinion. Not financial or legal advice.

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