Bonderman’s TPG to Buy Cushman in $2 Billion Transaction

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David Bonderman
David Bonderman, Co-Founder of TPG Capital. Photographer: Andrew Harrer/Bloomberg

David Bonderman’s TPG Capital agreed to buy Cushman & Wakefield Inc., the largest closely held commercial-property brokerage, for about $2 billion including debt and merge the company with its DTZ unit.

Exor SpA, the Agnelli family’s Italian holding company, will generate net proceeds of $1.28 billion by selling a 75 percent stake in Cushman, according to a statement Monday. Combining Cushman with DTZ will create a real estate services firm with an estimated $5.5 billion in annual revenue operating under the Cushman name, which has almost 100 years of brand equity.

“It’s fantastic that it’s under the Cushman & Wakefield name, which has been an iconic name in the industry for many years,” Carlo Barel di Sant’Albano, Cushman’s international chief executive officer, said in a telephone interview. “We will have better capabilities globally.”

A combination of New York-based Cushman and DTZ will create a global company that will be ranked third in the industry, behind Jones Lang LaSalle Inc., which has $5.8 billion to $5.9 billion of annual revenue, said Brandon Dobell, an analyst with William Blair & Co. CBRE Group Inc. will remain No. 1, with revenue that may top $14 billion, he said.

Creating a brokerage with that heft has been a goal for Brett White, a former CBRE CEO who will have the same title at the combined Cushman and DTZ.

Third Choice

“The thesis we developed at TPG was that there was a real opportunity to break up what seemed to us to be a duopoly at the top,” White said in a phone interview. “There’s nothing that we’re going to do that’s going to change the fortunes of CBRE or JLL -- they’re wonderful companies. But we do think the market has been asking for and needs a third real choice.”

Unlike its larger competitors, the new Cushman will have the “agility” that comes with being closely held, including the ability to deploy capital without the bureaucracy associated with public companies, White said. An initial public offering might be an option “at some point in our future,” once the transition is complete, he said.

The joint company will have more than 43,000 employees, Cushman said in a separate statement Monday. Exor said the deal represents a capital gain of about $722 million for its stake in Cushman. The transaction is expected to be completed in the fourth quarter.

Cassidy Purchase

TPG, based in Fort Worth, Texas, bought DTZ late last year. In January, DTZ completed the acquisition of Cassidy Turley, a brokerage with strength in the Americas, creating a global top-three commercial real estate services firm. The combined company has about $2.9 billion in annual revenue, according to a statement at the time.

DTZ had a market share for commercial property sales of more than 50 percent in China and was ranked third in that category in the U.K., according to the January statement.

Cushman reported revenue of $2.85 billion last year. Net income rose 33 percent to $61.6 million from the previous year. Fee and service revenue from the Asia-Pacific region climbed 25 percent.

Cushman & Wakefield came into existence in 1917 when brokers J. Clydesdale Cushman and Bernard Wakefield took over a New York real estate firm that had been owned by John de Saulles, a one-time Yale University football hero who had been murdered. The firm traces its roots to the 1820s, when London brokerage Healy & Baker, which would eventually become Cushman’s European operation, was started.

“If you’re with Cassidy, and your business card went to DTZ and now it changes to Cushman, you just hit the lottery,” said Mitch Germain, an analyst with JMP Securities. “They’ve been around forever and the Cushman name carries a lot of prestige.”

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