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CBRE Group and Turner & Townsend Holdings Limited today announced an agreement under which CBRE will acquire a 60 percent stake and enter into a strategic partnership with Turner & Townsend, a global leader in program, project and cost management from the United Kingdom.
CBRE will pay $ 1.3 billion in cash, of which 55 percent will be paid at close. The deal preserves Turner & Townsend’s existing management team, legacy, operational independence and partnership structure, which will hold the remaining 40% ownership.
The deal is valued by Turner & Townsend at approximately $ 2.2 billion and is expected to immediately boost CBRE’s profits.
Turner & Townsend provides program management, cost consulting, project management and advisory services to clients in 46 countries.
It operates in three business segments: Real Estate (62% of net revenue) – serves investors and tenants in all types of property, including data centers and biological facilities; Infrastructure (31% of net revenue) – in particular, transport, environmental and power generation projects, as well as natural resources (7% of net revenue) – renewable energy sources, alternative fuels, liquefied natural gas and other projects.
For the 12 months ended April 30, 2021, Turner & Townsend had net sales of approximately $ 923 million.
“This is a transformational deal for our project management business in terms of both breadth and scale of opportunity,” said Bob Sulentich, president and CEO of CBRE.
“We see significant opportunities for long-term growth in project management, driven by increased public and private investment in infrastructure and a move towards a low-carbon global economy. Turner & Townsend is by far the best firm to help us realize our ambitions in this business. It is an exceptionally well-run company with a first-class brand, an enviable customer base and experience to complement our capabilities. ”
One of the key benefits of the strategic partnership for Turner & Townsend is the ability to significantly expand its business in the Americas, where CBRE has strong tenant and investor relationships and is a market leader.
Vincent Clancy, Chairman and CEO of Turner & Townsend, said: “The CBRE and Turner & Townsend joint partnership will create a leading global provider of programs, projects and cost management from day one. Turner & Townsend will continue to offer independent advice, solutions and program-level thinking in the Real Estate, Infrastructure and Natural Resources sectors. Our global network means that it applies everywhere in the world – we work where our customers do. The combination of an unrivaled global presence, industry expertise, commitment to investment and an incredible team of people will make CBRE and Turner & Townsend the leading firms in our industry. ”
Following the close of the deal, Clancy and the existing Turner & Townsend management team will continue to operate the company on a day to day basis and all of its services will continue to be provided under the Turner & Townsend brand. Turner & Townsend’s financial results will be consolidated and presented within the CBRE Global Workplace Solutions (GWS) business segment.
Turner & Townsend will be governed by a new board of directors, which will include three CBRE executives – Sulentik, Jack Derburg, CEO of GWS, and Chandra Dhandapani, Chief Transformation Officer and Chief Operating Officer of GWS, as well as three CEOs of Turner & Townsend – Mr. Clancy, Jeremy Latom-Sharp, Chief Financial Officer, and James Dand, Chief Operating Officer.
The deal is expected to close in the fourth quarter of this year.
Morgan Stanley & Co. LLC acts as financial advisor and Simpson Thacher & Bartlett LLP and Dentons act as legal advisors to CBRE. Rothschild & Co acts as financial advisor and Pinsent Masons LLP as legal advisor to Turner & Townsend.
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