CBRE Group Inc.
) announced the completion of the acquisition of UK-based
commercial building technical engineering services provider -
Norland Managed Services Ltd. The deal was in line with the
company's efforts to enhance it capabilities and expand its
corporate outsourcing platform in Europe. Notably, following this
announcement, shares of CBRE hit a new 52-week high of $26.03
during the trading session on Dec 23.
To acquire Norland, CBRE paid £265.5 million (around $434.3
million) in cash at closing, which included a payment for excess
working capital and related items. In addition, the company
issued 362,916 common stock shares at the closure. Also, it may
pay up to £50 million in cash ($81.8 million) in deferred
Notably, CBRE funded the acquisition with cash in hand and
borrowings under its existing revolving credit facility. The
company had over $500 million of cash on its balance sheet and
around $1.1 billion available on its revolving credit facility
while exiting third-quarter 2013.
With the acquisition, Norland is now a part of the company's
Global Corporate Services business in EMEA (Europe, the Middle
East & Africa). The CBRE/Norland operations will be led by
Ian Entwisle as its CEO.
Founded in London in 1984, Norland earned its repute for its
capabilities in managing critical environment facilities, such as
data centers and trading floors. It offers its building technical
engineering services not only to commercial real estate owners
and occupiers in the UK and Ireland, but has a growing clientele
in the U.S. and Singapore. It has 4,000 employees in 14 offices
and offers its services to over 300 clients.
We believe this acquisition is a strategic fit for CBRE as it
gives the company the scope to enhance its business in the EMEA
region. Particularly, a compound annual growth rate of over 20%
in revenue and profit at Norland over the past 10 years boosts
our confidence in this strategic buyout. Also, the company
expects it to be moderately accretive to its earnings
CBRE currently has a Zacks Rank #3 (Hold). Investors
interested in the real estate operations industry may consider
E-House (China) Holdings Ltd
Kennedy-Wilson Holdings, Inc.
). All these carry a Zacks Rank #1 (Strong Buy).
CBRE GROUP INC (CBG): Free Stock Analysis
E-HOUSE CHINA (EJ): Free Stock Analysis
FIRSTSERVICE CP (FSRV): Free Stock Analysis
KENNEDY-WILSON (KW): Free Stock Analysis
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