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Jones Lang LaSalle To Acquire HFF For About $2 Bln In Cash And Stock

Jones Lang LaSalle Inc. (JLL), a provider of real estate and investment management services, has agreed to acquire all the outstanding shares of HFF, Inc. (HF) in a cash and stock transaction with an equity value of about $2 billion, the two companies said Tuesday. The transaction has been unanimously approved by the boards of directors of both companies.

HFF is a commercial real estate capital market intermediaries in the U.S. Since 1998, the company has closed more than $800 billion in over 27,000 transactions, achieving record revenue in 2018 of more than $650 million.

JLL said that through this combination, it will significantly bolster its full-service Capital Markets services to clients. The transaction will allow the company to rapidly scale its U.S. Capital Markets presence, accelerate growth of its debt advisory business in Europe and Asia Pacific, and drive increased operating efficiency globally.

Under the terms of the agreement, HFF shareholders will receive $24.63 in cash and 0.1505 JLL shares for each HFF share. Based on the closing price of JLL stock of $163.02 on March 18, 2019, the cash and stock consideration to be received by HFF shareholders at closing is valued at $49.16 per HFF share.

The share price represents a nearly 6 percent premium over the closing stock price on March 18, 2019 (before the positive impact of the $1.75 per share special dividend declared on January 31, 2019 and paid on February 27, 2019).

Upon closing of the transaction, JLL shareholders are expected to own approximately 87 percent of the combined company, while HFF shareholders are expected to own approximately 13 percent.

Mark Gibson, CEO of HFF, will join JLL as CEO, Capital Markets, Americas and Co-Chair of its Global Capital Markets Board.

The companies said that all seven Executive Committee members of HFF have agreed to vote their shares, representing 3 percent ownership of HFF, in favor of the transaction. Key HFF senior leaders and capital markets advisors have entered into 3 to 4 year commitments related to employment, non-competition and/or retention.

JLL said it anticipates adding one of HFF's existing directors to JLL's Board of Directors effective as of the closing of the transaction.

The company expects the combination to deliver significant run-rate synergies, estimated at approximately $60 million over two to three years.

The transaction, which is not contingent upon receipt of financing, is expected to close in the third quarter of 2019, subject to HFF shareholder approval and customary closing conditions.

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