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CBRE Takes 60% Ownership of Turner & Townsend

CBRE Takes 60% Ownership of Turner & Townsend
28 July 2021
 

CBRE has announced a definitive agreement whereby they will acquire a 60 per cent ownership interest in Turner & Townsend, a UK-based global leader in program, project and cost management.

CBRE will acquire the stake for approximately £960 million ($1.3 billion) in cash, with 55 per cent to be paid upon closing.

The transaction preserves Turner & Townsend’s existing leadership team, heritage, operational independence and partnership structure, which will hold the remaining 40 per cent ownership interest.

The transaction is subject to regulatory approvals and closing is expected in Q4 of this year.

Morgan Stanley & Co. LLC is acting as financial advisor and Simpson Thacher & Bartlett LLP and Dentons are acting as legal advisors to CBRE. Rothschild & Co is acting as financial advisor and Pinsent Masons LLP as legal advisor to Turner & Townsend.

 

"Turner & Townsend is by far the best firm to help us realize our ambitions for this business. It is an exceptionally well-run company with a first-rate brand, enviable client base and expertise that complements our capabilities."

–Bob Sulentic

President and Chief Executive Officer, CBRE

 

Turner & Townsend a £1.6 Billion Company

 

The transaction values Turner & Townsend at approximately £1.6 billion ($2.2 billion) and is expected to be immediately accretive to CBRE’s earnings.

Turner & Townsend provides program management, cost consultancy, project management and advisory consulting services for clients in 46 countries. It operates across three business segments: Real Estate (62 per cent of net revenue) – serving investors and occupiers across all property types, including data centres and life-science properties; Infrastructure (31 per cent of net revenue) – notably, transportation, environmental and power generation projects, and Natural Resources (7 per cent of net revenue) – renewable energy, alternative fuels, liquified natural gas and other projects.

For the 12 months ended April 30, 2021, Turner & Townsend’s net revenue totalled approximately £665 million ($923 million) and adjusted EBITDA totalled approximately £124 million ($172 million).

Among the key benefits to Turner & Townsend from the strategic partnership is the opportunity to materially expand its business in the Americas, where CBRE has deep occupier and investor relationships and a leading market presence.

Vincent Clancy, Chair and CEO of Turner & Townsend, said: “The combined partnership of CBRE and Turner & Townsend will create the premier global provider of program, project and cost management from day one. Turner & Townsend will continue to offer independent advice, solutions and program level thinking across the Real Estate, Infrastructure and Natural Resources sectors.

"Our global network means this applies everywhere in the world – we operate where our clients operate. The combination of unrivalled global footprint, sector expertise, commitment to investment and an incredible team of people will make CBRE and Turner & Townsend the go-to firms in our industry.”

Upon closing the transaction, Clancy and the existing Turner & Townsend management team will continue to run the company on a day-to-day basis, and all its services will continue to be delivered under the Turner & Townsend brand. Turner & Townsend’s financial results will be consolidated and reported within CBRE’s Global Workplace Solutions (GWS) business segment.

Turner & Townsend will be governed by a new Board of Directors, consisting of three CBRE executives – Mr. Sulentic, Jack Durburg, Global CEO, GWS, and Chandra Dhandapani, Chief Transformation Officer and COO, GWS, and three Turner & Townsend executives – Mr. Clancy, Jeremy Lathom-Sharp, Finance Director, and James Dand, Chief Operating Officer.

Bob Sulentic, President and Chief Executive Officer of CBRE commented: 

"This is a transformational transaction for our project management business in terms of both breadth and scale of capabilities. We see sizable secular growth opportunities in project management, which are being propelled by rising public and private infrastructure investment and the drive to a low-carbon global economy. Turner & Townsend is by far the best firm to help us realize our ambitions for this business. It is an exceptionally well-run company with a first-rate brand, enviable client base and expertise that complements our capabilities."

Picture: a photograph of Bob Sulentic

Article written by Ella Tansley | Published 28 July 2021

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