TPG consortium lines up $1bn DTZ buy

TPG Capital is at the heart of a $1.05 billion deal to acquire global property services firm DTZ, according to multiple reports.

The Austin, Texas-based private equity firm is supposed to have teamed up with Canadian pension fund, Ontario Teachers’ Pension Plan and Hong Kong-based private equity firm PAG, to buy the firm from Australian-listed engineering and facilities management firm UGL, Reuters reported.

The Wall Street Journal noted how the negotiations “remained fluid” and a “deal isn’t assured” although the newspaper also said that, should a deal materialise, TPG already was lining up new senior management, naming ex-CBRE chief executive Brett White as having a “significant role”.

UGL purchased DTZ on 2011 when the company was struggling under a significant debt burden. That debt led to it being placed into administration before its sale was completed. Then, just two years later, UGL announced it was considering a de-merger with DTZ with a view to listing the firm on the stock market as well as a private sale, which alerted the attention of various private equity suitors.

The acquisition by TPG would not be made from its real estate platform, which was launched in 2009. Rather, it would be executed by its main private equity business.

According to Reuters, TPG has been investing heavily of late from its recently closed, sixth Asia fund. That vehicle was expected originally to collect $4 billion from investors, but was closed on $3.3 billion in what has been described as an “accelerated close”.

No official announcement has been made on the sale and yet however one person familiar with DTZ told PERE how staff expected an investment from private equity firms to amount to a significant capital infusion for the company and to spur its growth after a couple of years of downscaling. “A fairly sizeable injection of equity, that’s what we’d have over our competitors,” the source said.

DTZ declined to comment and TPG was unavailable for comment at press time.