22.02.11
Acquisitions Advance Company’s Global Investment Management Strategy
CB Richard Ellis Group, Inc. (NYSE:CBG) today announced that it has entered into definitive agreements to acquire the majority of the real estate investment management business of Netherlands-based ING Group N.V. (ING) for approximately $940 million in cash. The acquisitions include substantially all of the ING Real Estate Investment Management (ING REIM) operations in Europe and Asia, as well as Clarion Real Estate Securities (CRES), its U.S.-based global real estate listed securities business. CB Richard Ellis will not acquire ING’s U.S.-based private market real estate investment management company.
The ING REIM operations being acquired will become part of CB Richard Ellis’ Global Investment Management segment (CBRE Investors), which will continue to be an independently operated business unit of the Company upon completion of the acquisitions. The businesses fit together exceptionally well. CBRE Investors has primarily focused on value-add and separate accounts. ING REIM has primarily focused on core funds and global listed real estate securities funds, except in Asia, where ING REIM manages value add and opportunity funds. There is also expected to be little overlap in the companies’ client bases, with a majority of CBRE Investors’ clients being U.S.-based and a majority of ING REIM’s based in Europe.
CB Richard Ellis will also acquire approximately $55 million of CRES co-investments from ING and potentially interests in other funds managed by ING REIM Europe and ING REIM Asia. In addition, the Company expects to incur transaction costs relating to the acquisitions of approximately $150 million (pre-tax), including financing, retention and integration costs. The acquisitions are expected to close in the second half of 2011 and are subject to approval by certain stakeholders, including regulatory agencies in the U.S., Europe and Asia.
As of December 31, 2010, the assets under management1 in the ING REIM portfolio CB Richard Ellis is acquiring totaled approximately $59.8 billion, including $29.5 billion in Europe; $5.1 billion in Asia; $19.4 billion in listed securities; and $5.8 billion in global fund of funds. CBRE Investors’ assets under management1 totaled $37.6 billion as of December 31, 2010.
“ING REIM, when combined with our existing Global Investment Management operations, will provide us with a significantly enhanced ability to meet the needs of institutional investors across global markets with a full spectrum of investment programs and strategies,” said Brett White, CB Richard Ellis’ chief executive officer. “Our firms fit together well and our investment program offerings are highly complementary. The combined enterprise will further diversify our revenue sources and as the global market leader, we will redefine success in real estate investment management.” CB Richard Ellis plans to finance the acquisitions with cash on hand and borrowings under its secured credit facility. CB Richard Ellis ended 2010 with more than $500 million of cash on its balance sheet, approximately $650 million undrawn on its revolving credit facility and a $800 million unutilized accordion facility. Later in the year, subject to market conditions, CB Richard Ellis may pre-pay a portion of the loans under its secured credit facility. Following the completion of the acquisitions, CB Richard Ellis’ net debt is expected to be less than 2.25x EBITDA, as calculated under its secured credit facility, well within its 3.75x maximum allowable covenant leverage ratio.
CB Richard Ellis will host a conference call to discuss the ING REIM acquisitions with the investment community today (February 15, 2011) at 12 Noon ET. A live webcast will be available through the Investor Relations section of the Company’s Web site at www.cbre.com. The direct dial-in number for the conference call is (877) 209-9919 for U.S. callers and (612) 332-0637 for international callers. A replay of the call will be available starting at 5:00 p.m. Eastern Time on February 15, 2011, and ending at midnight Eastern Time on February 22, 2011. The dial-in number for the replay is 800-475-6701 for U.S. callers and 320-365-3844 for international callers. The access code for the replay is 192225. A transcript of the call will be available on the Company’s Investor Relations Web site at www.cbre.com/investorrelations.
BofA Merrill Lynch acted as sole financial advisor to CB Richard Ellis and Simpson Thacher & Bartlett LLP acted as its legal advisors.
About CB Richard Ellis CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2010 revenue). The Company has approximately 31,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com.