TPG, PAG consortium finalizes acquisition of Australia's DTZ
TPG Capital and PAG Asia Capital, together with co-investor Ontario Teachers' Pension Plan (OTPP), have completed their acquisition of DTZ, the property services arm of Australia-listed UGL, for an enterprise valuation of A$1.215 billion ($1.2 billion).
In a statement UGL said the net proceeds from the sale are expected to be in the range of $1.0-1.05 billion, depending on the finalization of transaction costs and other sale adjustments.
UGL bought UK-based DTZ in 2011 as a distressed asset, paying GBP77.5 million ($124 million). Struggling with high debts and declining profits within its core engineering services business, UGL had originally planned to spin out DTZ via a public share sale.
TPG, PAG and OTPP had reached an agreement with UGL in June, four months after
the parent had first revealed that third-party investors had expressed interest in the asset.
Claiming a history that dates back to 1784, DTZ sells and leases office space on behalf of developers and property owners. The business employs 24,200 people in 208 offices in 52 countries, with a global headquarters in Chicago.
It generated A$1.9 billion in revenue for the 2013 financial year, up 21% year-on-year, and accounted for 46% of UGL's total underlying operating revenue. EBIT rose 19% to A$113.4 million, representing a margin of 5.9%. DTZ's order book ended the year at A$3.5 billion.
"Whilst over the last 12 years we have built a great property services company which is a global leader in its industry, we recognize that he TPG and PAG Consortium are better able to fund and support he strong future growth potential and strategic opportunities of DTZ as it continues to position itself as one of the global property services leaders ensuring the long term interests of our clients and employees are maximized," said Richard Leupen, managing director and CEO of UGL.
Tod Lickerman will remain in place as global CEO of DTZ, while Brett White, former CEO of CBRE, is investing in the acquisition alongside the consortium and will join the board of directors before becoming executive chairman in March 2015.
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