Investors eye Australian engineering carve-out

The company said in its half-year results presentation that it is currently evaluating interest in DTZ from a third party. The investor was not identified; however, The Wall Street Journal has reported that several informal approaches have been made by private equity firms. Any sale would put a halt to earlier plans to list the unit as a separate entity by end of the year.

Claiming a history that dates back to 1784, DTZ sells and leases office space on behalf of developers and property owners. The business now operates in 52 countries and employs more than 40,000 people. Around half of its revenues are generated in the US, with the balance coming from Europe, Asia and Australia. Its main competitors include CBRE Group and Jones Lang LaSalle.

The sale comes at a time when UGL's finances have suffered following the end of Australia's mining boom. Shares in the Sydney-headquartered company fell 12%, close to eight-year lows reached in December, after its half-year results revealed engineering profits tumbled 40%.

Adding to UGL's woes, the firm has had to fend off allegations from former DTZ president, Robert Shibuya, that it misstated financial results in order to deceive the board of directors and investors. Shibuya also sued UGL in California on February 10, claiming he was wrongfully fired for complaining about "unlawful ‘cooking of the books'" and because he was Japanese.

UGL responded in statement on the Australia Securities Exchange yesterday, saying claims of financial manipulation and discrimination were "completely baseless."

 

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• Topics
• Australasia
• Industrials
• Buyouts
• Australia
• buyout