CBRE Group, Inc. (NYSE:CBRE) today announced a definitive
agreement to acquire J&J Worldwide Services, a leading provider
of engineering services, base support operations and facilities
maintenance for the U.S. federal government, from Arlington Capital
Partners, a Washington, D.C.-area private investment firm
specializing in government regulated industries.
The initial purchase price is $800 million in cash, plus a
potential earn-out of up to $250 million, payable in 2027, subject
to the acquired business meeting certain performance thresholds. In
2024, J&J is projected to produce more than $525 million of
revenue and approximately $65 million of EBITDA1, continuing its
recent track record of low double-digit annual growth.
Additionally, CBRE expects to benefit from tax attributes and
synergies arising from the transaction. The acquisition is expected
to be accretive to CBRE’s earnings in 2024.
J&J primarily serves the U.S. Department of Defense through
long-term, fixed-price contracts. The company employs more than
3,300 people worldwide, serving more than 250 hospitals, clinics
and military installations primarily in the United States as well
as in Europe, Asia, the Caribbean, and the Middle East.
“The acquisition is consistent with key elements of our M&A
strategy that focus on enhancing our technical services
capabilities, increasing revenue resilience and secular growth and
expanding our government client base within Global Workplace
Solutions,” said Bob Sulentic, chair & chief executive officer
of CBRE. “We are adding a company with deep government contracting
experience, long-term customer relationships and a 50-year record
of outstanding technical service delivery.”
J&J serves as a trusted partner to U.S. federal civilian and
defense agencies delivering mission-critical services across three
business lines:
- Healthcare and Medical Solutions, serving such institutions as
Brooke Army Medical Center and Walter Reed National Military
Medical Center
- Mission Support Solutions, serving the United States Naval
Academy and such military bases as the U.S. Naval Station, Rota,
Spain
- Engineering Solutions, which provides services ranging from
architectural, mechanical, electrical, plumbing and fire protection
for Naval Medical Center Portsmouth and the Naval Support Facility
Diego Garcia and others.
Steve Kelley, chief executive officer of J&J Worldwide
Services, said: “Becoming part of CBRE provides J&J a great
opportunity to continue building upon and expanding the solutions
we provide our military customers at mission-critical facilities
around the world. Arlington Capital Partners provided the industry
expertise and guidance needed to scale our solutions at an
unrivaled pace and prepare us for continued growth. We are excited
about combining our capabilities and track record with CBRE’s to
enhance our commitment to serving those that serve our nation.”
Closing of the acquisition is subject to obtaining applicable
regulatory clearances and other customary closing conditions.
Closing is expected in the coming months.
Citi is acting as financial advisor and Simpson Thacher &
Bartlett LLP and ArentFox Schiff LLP are acting as legal advisors
to CBRE. J.P. Morgan Securities LLC is acting as financial advisor
to J&J and Sheppard Mullin Richter & Hampton LLP as legal
advisor to J&J and Arlington Capital Partners.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500
company headquartered in Dallas, is the world’s largest commercial
real estate services and investment firm (based on 2022 revenue).
The company has approximately 115,000 employees (excluding Turner
& Townsend employees) serving clients in more than 100
countries. CBRE serves a diverse range of clients with an
integrated suite of services, including facilities, transaction and
project management; property management; investment management;
appraisal and valuation; property leasing; strategic consulting;
property sales; mortgage services and development services. Please
visit our website at www.cbre.com. We routinely post
important information on our website, including corporate and
investor presentations and financial information. We intend to use
our website as a means of disclosing material, non-public
information and for complying with our disclosure obligations under
Regulation FD. Such disclosures will be included in the Investor
Relations section of our website at https://ir.cbre.com.
Accordingly, investors should monitor such portion of our website,
in addition to following our press releases, Securities and
Exchange Commission filings and public conference calls and
webcasts.
About J&J Worldwide
Services
J&J Worldwide Services (J&J) provides World–Class
facility services to the United States Federal Government and
civilian customers through its Healthcare & Medical Solutions,
Mission Support Solutions, and Engineering Solutions business
segments. Since 1970, J&J has developed a comprehensive
portfolio of aseptic cleaning and maintenance services for military
hospitals and clinics as well as a wide array of facility
management, operational support, and integrated asset management
services for Department of Defense (DoD) military bases. J&J
has built a 50–year legacy supported by a more than 3,300–employee
global workforce in locations throughout the Contiguous United
States (CONUS), Alaska, Hawaii, U.S. Territories and Outside of the
Contiguous United States (OCONUS) (Diego Garcia, Thailand, Germany,
Italy, Belgium, Spain, Philippines, United Kingdom, Guam, and South
Korea). To learn more about J&J Worldwide Services, visit:
https://www.jjwws.com/
About Arlington Capital
Partners
Arlington Capital Partners is a Washington, D.C. area private
investment firm specializing in government regulated industries.
The firm partners with founders and management teams to build
strategically important businesses in the aerospace and defense,
government services and technology, and healthcare sectors. Since
its inception in 1999, Arlington has invested in over 150 companies
and is currently investing out of its $3.8 billion Fund VI. For
more information, visit Arlington’s website at www.arlingtoncap.com
and follow Arlington on LinkedIn.
Forward-Looking Statements
Certain of the statements in this release regarding CBRE’s
definitive agreement to acquire J&J Worldwide Services that do
not concern purely historical data are forward-looking statements
within the meaning of the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are made based on our management’s expectations and
beliefs concerning future events affecting us and are subject to
uncertainties and factors relating to our operations and business
environment, all of which are difficult to predict and many of
which are beyond our control. Accordingly, actual performance,
results and events may vary materially from those indicated in
forward-looking statements, and you should not rely on
forward-looking statements as predictions of future performance,
results or events. Numerous factors could cause actual future
performance, results and events to differ materially from those
indicated in forward-looking statements, including, but not limited
to, CBRE’s ability to gain the necessary regulatory approvals and
satisfy other closing conditions in order to complete the
acquisition of J&J Maintenance and upon completion, to
successfully integrate and operate the business within CBRE’s
Global Workplace Solutions segment, as well as other risks and
uncertainties discussed in our filings with the U.S. Securities and
Exchange Commission (SEC). Any forward-looking statements speak
only as of the date of this release. We assume no obligation to
update forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting
forward-looking information, except to the extent required by
applicable securities laws. If we do update one or more
forward-looking statements, no inference should be drawn that we
will make additional updates with respect to those or other
forward-looking statements. For additional information concerning
factors that may cause actual results to differ from those
anticipated in the forward-looking statements and other risks and
uncertainties to our business in general, please refer to our SEC
filings, including our Form 10-K for the fiscal year ended December
31, 2022, and our Form 10-Q for the period ended September 30,
2023. Such filings are available publicly and may be obtained from
our website at www.cbre.com or upon request from the CBRE Investor
Relations Department at investorrelations@cbre.com.
1 This press release includes reference to EBITDA, which is a
non-GAAP measure. EBITDA represents earnings before the portion
attributable to non-controlling interests, net interest expense,
write-off of financing costs on extinguished debt, income taxes,
depreciation and amortization, and asset impairments.
We have not provided the most comparable GAAP financial measures
nor reconciliations of forward-looking EBITDA included in this
release to GAAP financial measures because it cannot be done
without unreasonable effort because certain items required for such
reconciliations are outside of our control and/or cannot be
reasonably predicted, such as the provision for income taxes,
forward-looking balance sheet, statement of income and statement of
cash flow. This non-GAAP measure should not be considered in
isolation from, or as an alternative to, financial measures
determined in accordance with GAAP. Other companies may calculate
EBITDA differently, and therefore the company's non-GAAP financial
measure may not be directly comparable to similarly titled measures
of other companies.
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version on businesswire.com: https://www.businesswire.com/news/home/20240205569570/en/
Brad Burke CBRE-Investors 214.863.3100 Brad.Burke@cbre.com
Steve Iaco CBRE-Media 212.984.6535 Steven.Iaco@cbre.com
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