CB Richard Ellis Group Announces Agreement To Acquire Trammell Crow Company | Facility Executive - Creating Intelligent Buildings

CB Richard Ellis Group, Inc. announced yesterday that the company has entered into a definitive agreement to acquire Trammell Crow Company for $49.51 per share of common stock in cash. According to a press release from CB Richard Ellis, the transaction is valued at approximately $2.2 billion, including the assumption of Trammell Crow Company’s corporate […]


https://facilityexecutive.com/2006/11/cb-richard-ellis-group-announces-agreement-to-acquire-trammell-crow-company/
CB Richard Ellis Group, Inc. announced yesterday that the company has entered into a definitive agreement to acquire Trammell Crow Company for $49.51 per share of common stock in cash. According to a press release from CB Richard Ellis, the transaction is valued at approximately $2.2 billion, including the assumption of Trammell Crow Company’s corporate […]
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CB Richard Ellis Group Announces Agreement To Acquire Trammell Crow Company

CB Richard Ellis Group Announces Agreement To Acquire Trammell Crow Company | Facility Executive - Creating Intelligent Buildings

CB Richard Ellis Group, Inc. announced yesterday that the company has entered into a definitive agreement to acquire Trammell Crow Company for $49.51 per share of common stock in cash. According to a press release from CB Richard Ellis, the transaction is valued at approximately $2.2 billion, including the assumption of Trammell Crow Company’s corporate debt as well as transaction and integration costs. It is expected to close either in late 2006 or early 2007, subject to approval by Trammell Crow Company’s shareholders and federal regulatory agencies as well as other customary conditions.

Upon completion of the transaction, the company will have combined pro-forma 2006 revenues of approximately $4.4 billion and 21,000 employees. It would be the first commercial real estate services company to qualify for the FORTUNE 500 list of the largest U.S. corporations. The combination of the two companies is expected to generate meaningful net expense synergy savings.

“Our strategic objective has long been to create the market-leading commercial real estate services firm delivering comprehensive solutions to our clients. Well targeted acquisitions have played a pivotal role in our strategy,” said Brett White, CB Richard Ellis’ President and Chief Executive Officer. “With the acquisition of insignia in 2003, we achieved preeminence in our transaction business. Now the acquisition of Trammell Crow Company creates the best-in-class corporate outsourcing and institutional property management business, and further augments our transaction business. Trammell Crow Company is one of the premier service companies in our industry, with a rich history, dedicated employees and strong management, a stellar client base and core competencies that are highly complementary to our own.”

Trammell Crow Company provides integrated outsourcing solutions for a stable of corporate clients, and the combined company will provide services to more than 85% of the Fortune 100. As a result of the transaction, CB Richard Ellis’ contractual revenues associated with outsourcing activities are anticipated to increase from approximately 8% to 18% of total revenues, based on 2006 expected results.

Upon completion of the transaction, Trammell Crow Company’s Development and Investment business will be run as a wholly owned but independently operated subsidiary. It will retain the Trammell Crow Company brand name. Robert E. Sulentic, Chairman and Chief Executive Officer of Trammell Crow Company, will join CB Richard Ellis as Group President with responsibility for the Development and Investment business as well as the company’s EMEA and Asia-Pacific operations.

Cal Frese, CB Richard Ellis’ President, Americas Region, said: “We are excited about having the Trammell Crow Company team join with ours and its service offerings becoming a valuable part of our platform. Importantly, both companies have very similar and proud heritages that are embedded in their corporate cultures, and which highly value integrity, work ethic and customer service excellence. We’ve had terrific success with integrating large service companies in the past, based on the idea of adopting the best people, processes and ideas of both companies, and we believe this integration will also succeed because of the similar cultures and business fit.”

The company plans to issue $2.2 billion of term loans to finance the transaction, and will also amend or refinance its existing $600 million revolving credit facility. In addition, the company plans to sell Trammell Crow Company’s approximately 20% ownership interest in Savills, plc, a real estate services provider in the United Kingdom. The Company’s initial view, to be refined at a later date, is that on a pro-forma basis, assuming the transaction had been completed on January 1, 2006, and after giving effect to the first-year expected net expense synergy savings and excluding one-time transaction and integration costs, the transaction would generate incremental percentage earnings accretion per share in the low teens.

More information can be found on the Investor Relations portion of the CB Richard Ellis Web site.

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