TPG, PAG-owned DTZ to buy Cushman & Wakefield for $2b
DTZ, a property services provider owned by TPG Capital, PAG Asia Capital and co-investor Ontario Teachers’ Pension Plan (OTPP), has agreed to buy industry peer Cushman & Wakefield for an enterprise value of $2 billion.
The three investors completed the purchase of DTZ from Australia Securities Exchange-listed UGL in November 2014 in a deal worth A$1.215 billion ($1.2 billion). Earlier this year, they added US-based Cassidy Turley to the platform, creating an entity with $2.9 billion in annual revenues, more than 28,000 employees and 3.3 billion square feet of real estate under management globally.
Bringing Cushman & Wakefield into the fold will take group revenues to over $5.5 billion, the employee count past 43,000 and real estate under management to more than 4 billion square feet. The combined entity will be one of the largest real estate services companies in the world. Market leaders CB Richard Ellis (CBRE) and JLL posted revenues of $9 billion and $5.4 billion in 2014.
Exor, an investment company controlled by the Agnelli family, founders of automaker Fiat, will receive $1.28 billion for its 75% holding in Cushman & Wakefield. This represents a capital gain of approximately $722 million on an investment made in 2007, according to a statement.
Cushman & Wakefield generated commissions and service fee revenues of $2.1 billion in 2014, while adjusted EBITDA came to $175.4 million and the adjusted EBITDA margin was 8.4%. This compares to $1.5 billion, $116 million and 7.6%, respectively, in 2007.
"We have been delighted to be a part of one of the most exciting growth stories in this industry. Our ambitions for the new Cushman & Wakefield are great and we stand ready to assist this global leader to continue to grow and flourish through our relationships, energy and capital," said Ben Gray, joint managing partner for TPG in Asia, speaking on behalf of the three investors, in a separate statement.
Ex-CBRE CEO Brett White, who became executive chairman of DTZ in March, will assume the role of chairman and CEO of the combined entity. Tod Lickerman, current global CEO of DTZ, becomes president, while Cushman & Wakefield's Europe, the Middle East and Africa CEO and North America CEO will get senior leadership roles in the combined entity.
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