The $2 billion acquisition of property services business Cushman & Wakefield from rival firm DTZ has completed to create one of the largest global real estate services companies.
Operating under the Cushman & Wakefield brand, the combined company will have a total of $5 billion in revenue, 43,000 employees, more than 4.3 billion square feet under management, and which has advised on $191 billion of transactions. It will be led by chairman and chief executive Brett White, the DTZ executive chairman, and global president Tod Lickerman, the former global chief executive of DTZ.
“This is a game-changing event in commercial real estate,” commented White. “Both legacy firms had been aggressively growing their respective platforms and deepening their reach into the market with new acquisitions and talent. Now we have the opportunity to see these ambitions come together – capturing the momentum in the market and clearly claiming our position at the top of the industry.”
EXOR, the investment arm of the Agnelli family, which owned 81 percent of Cushman received $1.27 billion, representing a capital gain of $722 million from the transaction. Back in 2008, EXOR paid £364.75 million ($557 million; €494 million) for an initial 67.5 percent stake in Cushman & Wakefield before gradually building that stake to 81 percent, the firm’s employees held the remaining 19 percent.
The merger will see the firm challenge the two largest property services firms, CBRE with $8.7 billion of revenue, and Jones Lang LaSalle, the second largest with revenues of about $5 billion. DTZ was already sitting in third spot after its merger with its US property services counterpart Cassidy Turley last year.
The Cassidy Turley merger came not long after DTZ itself was acquired for $1.215 billion by a consortium of private equity bidders, including Texas-based firm TPG Capital, Hong Kong-based PAG Asia Capital and Canadian pension fund, Ontario Teachers’ Pension Plan.
Speaking on behalf of the investors, TPG founding partner, David Bonderman, said: “The formation of the new Cushman & Wakefield is the next chapter in the most exciting growth story in the real estate industry.”
“TPG is excited to partner with Brett and his management team as they continue to grow the business.”