Brett White is ready to lead his latest buyout-built enterprise to an initial public offering
Cushman & Wakefield, the globe-straddling property brokerage and services giant, on June 20th filed for an initial public offering (IPO) with the US Securities and Exchange Commission, which could value the company at over $5 billion, according to sources cited by the Wall Street Journal.
The initial filing indicates a plan to raise up to $100 million to reduce the company’s debt. However, this sum is considered a “placeholder amount” and could be enlarged to around $1 billion, according to the Journal account.
Hong Kong’s PAG Holds 34% Stake in Global Agency
The S-1 filing revealed that Chicago-based Cushman & Wakefield’s major shareholders include the Hong Kong-based private equity house PAG, with a 33.6 percent stake, and San Francisco-based TPG Funds, with a 44.7 percent stake. The Ontario Teachers Pension Plan holds an 11.7 percent stake. Barring a very large “cashing-out” type IPO, the three major shareholders will continue to control Cushman & Wakefield after the offering.
The IPO follows after the property-services giant DTZ — then backed by the same three major shareholders — bought then-rival Cushman & Wakefield in 2015 for $2 billion, but assumed the Cushman & Wakefield banner for operations. That C&W buyout came after the private equity-led firm had added US-based brokerage Cassidy Turley to its portfolio.
Considered the driving force behind the industry roll-up is Brett White, Cushman & Wakefield’s chief executive officer and previously the CEO at CBRE, which also grew through debt-backed acquisition of brokerages around the world. In the trade press, White has not been shy his ambitions to grow Cushman & Wakefield into a rival to CBRE and JLL at the top of the property brokerage rankings.
IPO Plan Announced After 21% Sales Growth in Q1
PAG Weijian Shan has another payday on the way, thanks to C&W
In the first quarter of 2018, Cushman & Wakefield reported revenues of $1.78 billion, up 21.0 percent year-over-year, and an operating loss of $80.7 million. For the quarter the company also reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $74.8 million.
For the year 2017, the company reported revenue of $6.92 billion, up 11.4 percent year-over-year, and an operating loss of $220.5 million. The company also reported adjusted EBITDA of $529.0 million for the year.
Cushman & Wakefield claims about 48,000 employees across 400 offices in 70 countries, and manages 3.5 billion square feet of commercial real estate space on behalf of institutional, corporate and private clients.
Last December the US firm promoted former EMEA chief John Forrester to the role of global president, working closely with White, at the same time that it named Matthew Bouw as CEO for its Singapore-headquartered Asia Pacific business.
More Acquisitions Could Be on the Way
In its SEC filing, Cushman & Wakefield suggested the property-services industry is ripe for further consolidation and roll-ups. “We are one of the top commercial real estate services firms, and beyond us and our two direct global competitors, the sector is fragmented among regional, local and boutique providers,” the company said. “Industry sources estimate that the five largest global firms combined account for less than 20 percent of the worldwide commercial real estate services industry by revenue.”
The IPO will be underwritten by Morgan Stanley, JPMorgan Chase & Co, Goldman Sachs Group Inc and UBS Group AG.
Leave a Reply